Federal Construction Contracting Blog

Federal Construction Contracting Blog

Legal Information and Resources for Federal Construction Contractors

The National 8(a) Association 2016 Winter Conference

Posted in Bid Protests, Events, Small Business Contracting

Ed DeLisle will present his seminar, “Navigating the Protest and Claims Processes as a Small Business,” on February 9th at the National 8(a) Association 2016 Winter Conference in Orlando, FL.

The conference is a two day event held on February 9th and 10th and will focus on federal and legal updates and how to navigate the ever-changing world of federal contracting. The nation’s top legal firms and the industry’s best consultants will be there to help 8(a) certified and non-8(a) certified businesses gain the valuable education, promotion, and federal contracting information they need to further advance their level of experience and achieve a higher degree of success.

For more information, and to register for the National 8(a) Association Winter Conference, please click here.


Deciding Whether to File a GAO Bid Protest

Posted in Bid Protests, Federal Procurement Policy

The Government Accountability Office (“GAO”) issues statistics each year regarding the outcome of bid protests.  In 2015, there were 2,639 cases filed and there we 587 decisions on the merits.  Of those, only 68 protests were sustained.  According to the way the GAO presents its statistics, that would indicate that protestors prevailed approximately 12% of the time.  In reality, since many protests were withdrawn or summarily dismissed, the protesters only prevailed in 68 of the 2,639 protests filed and the true success rate was closer to 3%.  With those odds, why would anyone file a GAO bid protest?  The answer requires a little closer scrutiny since statistics can be misleading.

There are a number of protests which should not have been filed in the first place since they are not supported by the facts or case precedent.  This could have been avoided by thorough legal research of prior decisions of the GAO and the United States Court of Federal Claims.  Careful screening before filing a protest will ultimately lead to a greater number of potentially meritorious protests.  It must always be kept in mind, however, that great deference is shown to the discretion of contracting officers.  What that means is that if the source selection boils down to a judgment call, the government is going to prevail.

The GAO reported that the most prevalent reasons for sustaining protests were:

(1) unreasonable cost or price evaluation

(2) unreasonable past performance evaluation

(3) failure to follow evaluation criteria

(4) inadequate documentation of the record

(5) unreasonable technical evaluation.

It is important to note that a significant number of protests filed with the GAO do not reach a decision on the merits because agencies voluntarily take corrective action in response to the protest rather than defend the protest on the merits.  Agencies need not, and do not, report any of the myriad reasons they decide to take voluntary corrective action.  If an agency decides to take corrective action, however, it may mean that the protest has merit and the corrective action may lead to a re-evaluation of the proposals.  In many cases, this is very outcome that would have resulted from a GAO decision.  In cases where the GAO dismisses the protest because the agency decides to take corrective action, those protests are not be included in the GAO’s calculation of protests decided on the merits.

One drawback in the system, however, is that in a negotiated procurement the protester is operating at a disadvantage because the source selection decision and supporting documents are not available for review.  This puts the protester in the difficult position of having to file the protest in order to determine whether there is a sound basis for the protest.  The critical agency documents are only made available to the protester’s attorney under a protective order.  It may be that after the protester’s attorney reviews the documents, which he is not permitted to share with this client, it will become apparent that the agency made a proper source selection.  That does not mean that the protest should not have been filed, however, because the protest was essential in order to obtain the best information.  There was also a possibility that favorable documents would have been located that may have led to a successful protest.  In fact, all of the most prevalent reasons for sustaining a protest, as listed above, were dependent upon review of the agency’s documents after the protest was filed.

Michael H. Payne is the Chairman of the firm’s Federal Contracting Practice Group and, together with other experienced members of the group, frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues, and dispute resolution.

Amy M. Kirby is an Associate in the firm’s Federal Contracting Practice Group and focuses her practice on government construction litigation. Amy’s practice includes a wide variety of federal construction matters.

Termination for Default Held Improper

Posted in Contractor Information Sources

A contractor performed a project involving the construction of stone dike extensions and other work at four sites on the Mississippi River.  Nelson, Inc.  ASBCA No.  57201 (December 15, 2015).  One of the issues was whether the four distinct sites were separable for purposes of applying the Termination for Default clause (FAR 52.249-10).  In other words, the question was whether the contractor could be terminated for failing to diligently prosecute the work on one of the four work sites, even though the overall contract allowed 165 days for completion.  The Board stated that “Where a contract is separable (sometimes also referred to as severable, or divisible) and a contractor is delinquent only as to a separable part of the contract work, it is improper for the contracting officer to terminate for default the entire contract.”  The contractor would not be prohibited from continuing performance on any of the sites where work was being performed in a timely manner.

However, the Board ruled that the termination for default was improper as to all of the sites.  On two of the sites, “Friars Point” and “Crow Island,” no separate Notices to Proceed were issued and, consequently, the time for performance of the work at those sites never commenced and there was no completion date or “delay” in performance at either site. The Board stated that “Without a start and completion date, there is no yardstick to measure whether Nelson failed to diligently prosecute the work at those separable sites.”  As to the other two sites, “Loosahatchie” and “Robinson Crusoe,” the Board found that the Corps failed to properly consider time extensions that were due and miscalculated the required completion dates at those sites.  As a result, the Board found that the default termination was “precipitate and unjustified.”

The decision applied the well-established requirement that the government has the burden of proving that the termination for default was justified. Lisbon Contractors, Inc. v. United States, 828 F.2d 759, 764 (Fed. Cir. 1987).  Discount Co. v. United States, 554 F.2d 435, 441, cert. denied, 434 U.S. 938 (1977), interprets the clause to require the government to demonstrate a “lack of diligence such that the government [cannot] be assured of timely completion” (emphasis added).  In Lisbon Contractors, 828 F.2d at 765, the Federal Circuit construed the clause to require “a reasonable belief on the part of the contracting officer that there was no reasonable likelihood that the [contractor] could perform the entire contract effort within the time remaining for contract performance.”  Since there has been a greater willingness on  the part of some government agencies to terminate contracts for default, contractors are well advised to do everything possible to prevent premature terminations and to be mindful of the considerable burden imposed on the government.

Michael H. Payne is the Chairman of the firm’s Federal Contracting Practice Group and, together with other experienced members of the group, frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues, and dispute resolution.

Small Business Contracting May Be Very Different in 2016

Posted in Contractor Information Sources, Small Business Contracting
This article was originally published by Law360 on December 16, 2015.

In the past year, the Small Business Administration has issued proposed rules that will likely result in major regulatory changes. Some of the most important changes are those relating to its mentor-protege program, and the performance of work requirements for prime contractors. The proposed rules affecting these areas have the potential to substantially alter the landscape of small business contracting in 2016.

The Actions of the Small Business Administration in 2015 Could Bring About Substantial Changes to Mentor-Protege Programs in the Coming Year

The intent of mentor-protege programs, generally, is to partner small business concerns with established businesses for the purpose of increasing the small business’ ability to win contracts and subcontracts, and otherwise succeed. Through these programs, mentor businesses provide business and technical assistance to their proteges. In February 2015, the SBA issued a proposed rule that would establish one governmentwide mentor-protege program for all small businesses, while continuing to operate the separate mentor-protege program available to participants in the 8(a) Business Development Program. The proposed rule would expand the program to small businesses other than those in the 8(a) program and would allow all entities in SBA approved mentor-protege relationships to seek opportunities, as joint venture partners, for which the protege entity is eligible. The finalization of this rule could mean big changes for small businesses in 2016.

The authority of the SBA to issue this proposed rule was granted to it by the Small Business Job Act of 2010 and the National Defense Authorization Act for Fiscal Year 2013. The 2010 Jobs Act permitted the SBA to establish mentor-protege programs for the Women-Owned Small Business Program, the HUBZone Program, and the Service-Disabled Veteran-Owned Small Business Program. It dictated that these mentor-protege programs be modeled after the mentor-protege program already available to participants in the 8(a) program.

The NDAA of 2013 further expanded the authority of the SBA relating to mentor-protege programs by empowering the SBA to create a mentor-protege program for all small business concerns, not only socioeconomically disadvantaged companies. Similar to the 2010 Jobs Act, the NDAA of 2013 required that mentor-protege programs be identical to the existing mentor-protege program for the 8(a) program, but also allowed the SBA to modify the program if necessary based on the type of small businesses participating as proteges. Furthermore, the NDAA of 2013 required approval by the SBA if any federal department or agency wished to operate, or continue to operate, its own mentor-protege program. While the 2010 Jobs Act and the NDAA of 2013 granted the SBA the power to change the structure of mentor-protege programs, the SBA failed to take any action until this year.

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Timely Documentation is Critical

Posted in Contractor Information Sources, Federal Procurement Policy, Procurement Information

In a recent decision by the Armed Services Board of Contract Appeals, Dick Pacific Construction Co., Ltd., ASBCA No. 57675 et. al., decided on December 15, 2015, the Board repeated something that has been said many times before:

We consider daily logs to be the most reliable evidence of what actually happened during construction. Technocratica, ASBCA No. 46567 et al., 99-2 BCA ¶ 30,391 (“Daily inspection reports have been held to be prima facie evidence of the daily conditions as they existed at the time of performance.”)

Boards and courts often refer to daily reports as “contemporaneous records,” because they were created at the time that the events occurred and usually well before a claim was anticipated.  It is for that reason that such records are assigned greater credibility than documents created after the fact.Inspector at construction ares

Field personnel on a construction project have many important things to do in a given day, but they are well advised to take the time to record specific events that may have an impact on the time or cost of performance.  The “remarks” section on a daily report is particularly important.  If a Quality Control Representative is asked to testify about conditions on the site that occurred several years earlier, the memory of the witness will be much more believable if his recollections are supported by contemporaneous records.

Michael H. Payne is the Chairman of the firm’s Federal Contracting Practice Group and, together with other experienced members of the group, frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues, and dispute resolution.

Legal Landscape: Top News in the Mentor-Protégé Program, Bond Claims & DBE Fraud

Posted in Contractor Information Sources, Small Business Contracting

WeOnviaLegalLandscapelcome to the third edition of Legal Landscape, a series we have developed with Onvia’s blog to provide government contractors with a quick, but thorough, summary of important legal developments and regulations in government contracting, as well as a plain-English explanation of how those developments may affect contractors at all levels of government. In this issue, we discuss recent trends in federal, state and local government contracting. Contractors should keep in mind that state and local agencies often look to changes in federal regulations as a guide for future changes at their respective levels. Changes recently made in the federal arena are likely to trickle down to state and local governments soon.

1) The SBA Offers Some Specifics on the Expansion of the Mentor-Protégé Program

As many government contractors may know, in February 2015, the U.S. Small Business Administration (SBA) issued a proposed rule aimed at expanding its mentor-protégé program. The proposed regulations would implement changes introduced by the Small Business Jobs Act of 2010 and the National Defense Authorization Act of 2013, and would permit a wide array of small businesses to participate in the SBA’s mentor-protégé program. Currently, only 8(a) certified firms can take advantage of the many benefits offered SBA’s mentor-protégé program, including a broad exception to affiliation for mentor-protégé joint ventures.

While this was great news for many back in February 2015, it has been nine months since this proposed rule was issued and we have yet to see an interim, or a final, rule. The delay has many government contractors asking when the SBA is actually going to put these changes into effect. Well, we now have some idea: Sometime in the first quarter of 2016.

On October 27, 2015, the U.S. House of Representatives’ Committee on Small Business Subcommittee on Contracting and the Workforce, chaired by U.S. Representative Richard Hanna, held a hearing entitled “Maximizing Mentoring: How are the SBA and DoD Mentor-Protégé Programs Serving Small Businesses?” Based on the testimony given at the hearing, and the information compiled in the Subcommittee’s related memorandum, it appears that a final rule will be issued in the first quarter of fiscal year 2016, and that the agency hopes to launch a pilot program sometime in the summer of 2016.

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Defenses to a Termination for Default

Posted in Contractor Information Sources

In a post publisConstruction Sitehed in 2013, we addressed the use of termination for default as a weapon. Unfortunately, construction contractors who fall behind schedule are automatically on the defensive and they rarely find that contracting officers are willing to concede government responsibility. The government, of course, is in a difficult position when it must explain to its customer – the end-user – that the scheduled completion date will not be met. All too often, instead of admitting that the contractor is not responsible, the threat of a termination for default is held over the contractor’s head because it is easier to blame the contractor than to admit that the government made a mistake.

The standard FAR “Default” clause (FAR 52.249-14) provides that a delay is excusable and does not provide a valid basis to terminate the contract for default if it is “beyond the control and without the fault or negligence” of the contractor. For a delay to be excusable under a construction contract, it must also be “unforeseeable.” A contractor may be excused if the delay is caused by defective government specifications, differing site conditions, constructive changes, a waiver of the contract completion date, or a failure of the government to comply with the procedural requirements that must be followed to support a termination for default. It is important for a contractor to document government-caused delays as they occur, rather than waiting to build a case after the fact.

The cases have held that a default termination is a drastic action that must not be undertaken without good cause. The FAR (49.402-3(f)) lists the factors that a CO “shall consider” in determining whether to terminate a contract for default:

  1. The terms of the contract and applicable laws and regulations.
  2. The specific failure of the contractor and the excuses for the failure.
  3. The availability of the supplies or services from other sources.
  4. The urgency of the need for the supplies or services and the period of time required to obtain them from other sources, as compared with the time delivery could be obtained from the delinquent contractor.
  5. The degree of essentiality of the contractor in the Government acquisition program and the effect of a termination for default upon the contractor’s capability as a supplier under other contracts.
  6. The effect of a termination for default on the ability of the contractor to liquidate guaranteed loans, progress payments, or advance payments.
  7. Any other pertinent facts and circumstances.

If a contractor has abandoned performance, or has clearly demonstrated an inability to complete the project in a timely manner, the decision to terminate is easy and difficult to oppose. In many cases, however, there are excusable causes of delay and it is not uncommon for defective specifications to be the culprit. Although FAR 52–233–1(i), requires a contractor to “proceed diligently with performance” while a dispute awaits resolution, there may be extenuating circumstances. For example, the Court of Federal Claims has stated that a contractor may be excused when the Government fails to provide reasonable clarification of a contract’s scope of work upon request. It has also been held that a contractor is not always obligated to continue performance if the decision to stop work is warranted by the particular facts.

We are not suggesting that a contractor should feel free to stop performance because it believes there is an excusable cause of delay. That is a dangerous strategy and should always be discussed with legal counsel. Let’s face it, it is difficult for a contractor to defend its position after it has been terminated. The interim financial hardship and impact to its performance rating is too severe. It is important, however, for a contractor to thoroughly document what has occurred and to continuously inform the government about why the delays are not its fault. A delay analysis that shows the impact of events to the critical path, with an emphasis on government-caused impacts, can be very useful. In the end, be courteous, vocal, persuasive, engaged, and never be silent.

Michael H. Payne is the Chairman of the firm’s Federal Contracting Practice Group and, together with other experienced members of the group, frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues, and dispute resolution.

Additional Changes Concerning VOSB/SDVOSB Verification?

Posted in Contractor Information Sources, Small Business Contracting

It’s been an eventfulNovember wooden blocks with many-coloured pumpkins and decor against an old wood background November for the Federal Government’s VOSB/SDVOSB programs.  First, the Department of Veterans Affairs (“VA”) issued a proposed rule outlining changes that would drastically change the manner in which eligibility requirements are analyzed (you can read about it here). Now, Congress is proposing additional changes to the VOSB and SDVOSB verification process.

On November 5, 2015, Representative Mike Coffman (a member of the House Small Business Committee, frequent critic of the VA and vocal advocate for VOSB/SDVOSBs) and his co-sponsors introduced HR 3945, The Improving Opportunities for Service Disabled Veteran-Owned Small Business Act of 2015. The bill is meant “to improve contracting opportunities for certain veteran-owned small businesses.”

In a press release issued on November 6, 2015, Coffman explained the purpose of the bill, stating that it aims to reform the current VOSB/SDVOSB programs in three key ways:

  • First, the bill harmonizes the definitions of VOSB and SDVOSB. This ensures that small variations between the Small Business Act and the Vets First Program are not used to justify additional inconsistencies between the VA and [Small Business Administration (“SBA”)] programs.
  • Second, the bill requires the VA to follow SBA regulations when verifying and certifying VOSBs and SDVOSBs. This ensures consistency in the awards process between the VA and SBA. For example, a SDVOSB can qualify at one agency and not another for procurement preferences. This inconsistency often adds cost, confusion, and opens the door to fraud.
  • Third, the bill creates an appeals process for SDVOSBs to challenge an agency decision.

This is not the first time that Representative Coffman has introduced a bill aimed at reforming VOSB/SDVOSB contracting programs. Back in 2013, he introduced the Improving Opportunities for Service-Disabled Veteran-Owned Small Business Act of 2013, which sought to transfer control of all VOSB/SDVOSB status-related protests from the VA to the SBA. As we explained back in 2013, Coffman’s 2013 bill would have eliminated the current system and replaced it with a single VOSB/SDVOSB verification process. It would also have unified the definitions of “unconditional ownership” and “unconditional control.” While the VA would have retained authority for determining whether an individual is a “service-disabled veteran,” the SBA would have had the authority to rule on all other eligibility factors including size, ownership, and control.

The 2015 bill differs from the 2013 version, but the underlying motivation appears to be the same: the promotion of greater consistency between the SBA and VA SDVOSB programs, and the streamlining of the VOSB/SDVOSB verification process.

Coffman explained the issues as follows:

Currently, veteran-owned small businesses (VOSB) and service-disabled veteran-owned small businesses (SDVOSB) face incredible challenges getting certified to participate in seeking and securing federal contracts under the program’s rules. The bill I introduced today reforms, streamlines, and simplifies the current process the VA and the SBA use to be certified as eligible…

Increasing SBA’s role in the appellate process will limit confusion in how to appeal and ensure a more predictable pattern in the final decisions…[i]t will also ensure impartiality by not having VA review its own previously denied claims.

Co-Sponsor of the bill, Jeff Miller (Chairman of the House Committee on Veterans’ Affairs), agreed:

This bill will reform an excessive and redundant bureaucracy that’s making business even more complicated for the people it was meant to help. By cutting needless red tape and streamlining the verification process, we can ensure veteran business owners are properly recognized for their service, while reducing fraud and freeing up more resources for veteran support.

This bill comes on the heels of a November 4, 2015 GAO report concerning VOSB/SDVOSBs, which outlines the improvements the VA has made to its VOSB/SDOVSB verification program since 2013. The GAO report emphasizes the advantages of a pilot program, initiated by the VA in September 2015, which made certain changes to the verification process. These changes are summarized in the chart below.
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The GAO report indicates that the VA plans to “fully transition to [the] new process by April 2016. It is unclear whether the bill will affect any further changes to the new VA verification program. We willkeep you posted on any new developments.

Edward T. DeLisle is Co-Chair of the Federal Contracting Practice Group. Ed frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues and dispute resolution.

Maria L. Panichelli is an Associate in the firm’s Federal Contracting Practice Group. Her practice includes a wide variety of federal contracting and construction matters, as well as all aspects of small business procurement.

Big News for Veteran-Owned Small Businesses

Posted in Small Business Contracting

VOSB-LOGOLast week, the House of Representatives voted to amend the Department of Transportation’s (“DOT”) definition of Disadvantaged Business Enterprises (“DBEs”) to include Veteran-Owned Small Business Concerns (“VOSBs”).  This was accomplished by passing the “Fairness to Veterans for Infrastructure Investment Act of 2015” (the “Bill”).  As the Bill states, its purpose is to improve contracting opportunities for veteran-owned small business concerns, and that is just what will happen if the Bill is signed into law.

If the Bill becomes law, VSOBs will be given preference on projects funded through the DOT, have more opportunities to be awarded contracts, and could, as subcontractors, contribute toward DBE hiring goals. This is great news for VSOBs and prime contractors, though some have expressed concern that it will adversely impact DBEs falling into other categories of disadvantaged businesses.

After passing the House last week, the Bill was received in the Senate and referred to the Committee on Environment and Public Works. We will keep you posted on its progress.

Edward T. DeLisle is Co-Chair of the Federal Contracting Practice Group. Ed frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues and dispute resolution.

Jacqueline J. Ryan is an Associate in the Federal Contracting Practice Group and focuses her practice on government contracts and construction litigation. She assists the Firm’s federal construction clients in matters involving contracts, bid protests, claim drafting and litigation in the federal courts.

VA Proposes Changes to VOSB/SDVOSB Regulations, Aims for Consistency with COFC Ruling in Cohen Seglias' Miles Construction Case

Posted in Contractor Information Sources, Small Business Contracting

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Listen up, VOSBs and SDVOSBs!  Major changes are in store for the Department of Veterans Affairs’ VOSB/SDVOSB program.

On November 6, 2015, the VA issued a proposed rule, which could drastically change the way the two eligibility requirements for VOSBs and SDVOSBs are interpreted.  The VA explained the changes as follows:

This proposed rule would clarify the eligibility requirements for businesses to obtain “verified” status, add and revise definitions, reorder requirements, redefine the definition of “control”, and explain examination procedure and review processes. This proposed rule would additionally implement new changes—references to community property restrictions, “unconditional” ownership, day-to-day requirements, and full-time requirements would be removed or revised and limited in scope; an exception for majority, supermajority, unanimous, or other voting provisions for extraordinary business decisions would be added.

So what, specifically, does that mean?  Well, first of all, under the new rule, the VA would no longer require a veteran or service-disabled veteran to “unconditionally” own his or her company.  The current regulation, which requires “unconditional” ownership, has caused problems for many VOSBs/SDVOSBs; standard corporate governance provisions such as rights of first refusal, transfer upon incapacity, or transfer upon bankruptcy were often seen as placing “conditions” on ownership and, therefore, nullifying VOSBs/SDVOSB eligibility. In fact, that is exactly what happened in our case, Miles Construction, LLC v. United States.

There, our client’s SDVOSB status was improperly canceled because the VA viewed a “Right of First Refusal” in the company’s governing documents as an impermissible transfer restriction.  It took the position that this “restriction” rendered ownership “conditional.”  However, when we challenged the agency’s decision, the Court of Federal Claims disagreed.  The Court concluded that Rights of First Refusal, such as the one at issue there, fell within the ambit of “normal commercial practices” and did “not affect the veteran’s unconditional ownership.”  Thus, our client’s SDVOSB status was restored and it was placed back in the VetBiz database of verified companies.  Shortly thereafter, in accordance with the guidance provided by the Court in the Miles case, the VA changed its official policy with respect to transfer restrictions.  Now, the VA seeks to amend the regulation (38 C.F.R. § 74.3) itself.  The new regulation would be consistent with the Miles decision, and would allow for “commercially reasonable” provisions in corporate governance documents.

As the rule explains:

Section 74.3(b) would be amended to directly address the concerns of VA in balancing commercially reasonable business practices against procurement integrity. Section 74.3(b) as it is currently written is considered by many in the veteran community to be unduly burdensome.  VA considered these concerns and addressed them by proposing to limit the scope of unconditional ownership, accepting commercially reasonable conditions and excluding only those that create a significant risk of fraud, waste and abuse. . .

Thus, 38 C.F.R. § 74.3, as amended, would state:

…(b) Unconditional ownership. Ownership must not be subject to prohibited conditions which cause or potentially cause ownership benefits to go to another (other than after death or incapacity).

(1) CVE will analyze conditions on ownership on a case-by-case basis. A condition(s) which is determined to align with commercially reasonable business practices will not be considered a prohibited condition. For purposes of determining commercial reasonability CVE will consider factors, including but not limited to, general use of similar conditions by concerns within the same or similar line of business and uniform applicability of the condition(s)…

The shifting requirements concerning ownership are not the only proposed change.  The VA also proposed major changes to 38 C.F.R. § 74.4, the regulation governing “control” of an  VOSB/SDVOSB company.  Similar to the ownership changes outlined above, the VA proposes to eliminate the “unconditional” control requirement.  Instead, the proposed regulation requires that the veteran owner have “control over all decisions of the governing body, with the exception of extraordinary business decisions.”  The proposed regulation also recognizes distinctions between types of companies (e.g. Corporation, Limited Liability Corporation, Partnership), which is something brand new.  You can see all the proposed changes, which includes the above, and others, here.

The VA has stated that these changes are the agency’s attempt to find “an appropriate balance between preventing fraud in the Veterans First Contracting Program and providing a process that would make it easier for more VOSBs to become verified.”  Moreover, these changes would “protect the minority owners of firms thereby encouraging investment and participation in veteran owned businesses.”  If these changes are enacted, VOSB/SDVOSBs will have a lot more flexibility in structuring their businesses, and, presumably, it will be a lot easier to figure out where one stands in terms of satisfying eligibility criteria.

Comments to the proposed rule are due by January 5, 2016.  We will keep you posted on the status of these developments.

Edward T. DeLisle is Co-Chair of the Federal Contracting Practice Group. Ed frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues and dispute resolution.

Maria L. Panichelli is an Associate in the firm’s Federal Contracting Practice Group. Her practice includes a wide variety of federal contracting and construction matters, as well as all aspects of small business procurement.