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.

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.

The Small Business Administration (“SBA”) recently issued a favorable decision on behalf of a firm client in a size determination case, and we wanted to share information from that decision with you.  While the decision is unpublished, it serves as a reminder of an important exception to the small business contracting rules relating to joint ventures and set aside contracts.

In July of 2015, thgavele U.S. Army Corps of Engineers (“USACE”) issued a solicitation for building repairs that was set aside for small business.  The size standard  assigned to the project was $36.5 million.  The firm’s client, an unpopulated joint venture (the “JV”) consisting of two companies, was the low bidder.  However, a day after bid opening, an unsuccessful bidder initiated a size protest claiming that the JV exceeded the size standard applicable to the procurement.  The unsuccessful bidder claimed that because the joint venture partners had indicated in the System for Award Management (“SAM”) that they were “not small” under two specific NAICS codes, that this fact automatically meant that the combined annual revenue of the partners exceeded the size standard for this procurement. As we successfully argued, that is not true.

When a joint venture submits an offer or a bid on a procurement, the companies forming the joint venture are considered affiliates in connection with that procurement.  For joint ventures interested in small business set asides, the general rule is that as affiliates, the sizes of the joint venture partners are aggregated in order to determine if the joint venture is small.  However, there is an important exception to this rule.  When the dollar value of the procurement, including options, is greater than one half of the small business size standard for the NAICS code selected for that procurement, a joint venture is small so long as each joint venture partner is small under the size standard.

In the size protest here, the value of USACE’s procurement was $22,405,001, and the accompanying small business size standard was $36.5 million.  Therefore, the value of the procurement was greater than one half of the size standard for the procurement ($18.25 million).  Because of this, the proper method of determining the JV’s size was not by aggregating the revenues of the joint venture partners, but rather by determining if the average annual receipts of each joint venture partner was greater than $36.5 million.  Neither of the joint venture partners’ average annual receipts exceeded that amount in this case.  As such, the SBA found that the JV was considered a small business for the procurement, defeating the size protest.

For companies considering the use of a joint venture to obtain small business set aside contracts, keep the above in mind and call your attorney if you have any questions.

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.

Please joinContractor's Agreement us for Maria Panichelli and Amy Kirby‘s seminar, “Avoiding Common Pitfalls in Small Business Government Contracting,” for the District of Columbia Procurement Technical Assistance Center (DC PTAC) on November 5th in Washington, D.C.

Rules, regulations, and laws relating to doing business with the Federal Government can be extremely confusing, and the consequences of breaking those laws can be very harsh. Understanding the laws that govern Federal contracting can make the difference between winning a contract, not winning a contract, or worse.
At this seminar, you will learn about:
  • Regulation
  • Government Contract Performance Run-in Problems
  • How to file Requests for Equitable Adjustments and Claims
  • Bid Protest Process
  • Teaming and Joint Venturing Techniques

To register for this event, please click here.

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.

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.

As maChange Ahead Signny of you already know, back in February 2015, the SBA issued its long-awaited proposed rule aimed at expanding its mentor-protégé program.  The proposed regulations implement changes introduced by the Jobs Act of 2010 and the National Defense Authorization Act of 2013, and would permit firms, other than those that are 8(a) Certified, to participate in the mentor-protégé program.  Moreover, if the proposed rule becomes final, all of the companies participating in the revamped program will be able to take advantage of the exclusion from affiliation.  While this was great news for many at the time, it has been almost nine months since this rule was issued and there has been no sign of any further action by the SBA.  Many of our clients have been asking when the SBA is actually going to put these changes into effect.  Well, it seems like we might finally have an answer.

The Committee on Small Business Subcommittee on Contracting and the Workforce, chaired by U.S. Representative Richard Hanna, began to express concern about the delay in implementing the new mentor-protégé programs and decided to investigate.  A Subcommittee hearing was held on October 27, 2015.   At the hearing, which was called “Maximizing Mentoring: How are the SBA and DoD Mentor-Protégé Programs Serving Small Businesses?”,  numerous individuals from the SBA testified about the agency’s progress on the expanded mentor-protégé program, and the challenges the agency has faced in getting these programs up and running.  Most importantly, these individuals also indicated that the 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.   You can watch the full hearing here.  We will keep you posted on any further 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.

Join partners Michael Payne and Ed DeLisle at the 2015 National 8(a) Association Winter Conference in Orlando, Florida for their presentation, “How to Effectively Team on a Federal Project.” In this discussion, Michael and Ed will explore the importance of well-crafted teaming agreements and how they are viewed by courts of various jurisdictions. They will also explore the practical implications of negotiating terms from both the prime and subcontractor perspectives, as well as cover the nuts and bolts of executing teaming arrangements on federal projects. For more information, or to register, please visit the National 8(a) Association website.

8a logo

Cohen Seglias is a proud sponsor of the 2015 National 8(a) Association Winter Conference, which focuses on the federal, legal and business updates that impact the ever-changing world of federal contracting. This year’s conference will be held in conjunction with the TRIAD Winter Meeting, bringing over 85 additional Small Business Liaison Officers to the National 8(a) conference attendees.

With more than 500 companies and key government stakeholders represented, this is an event you can’t afford to miss!

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.

Edward T. DeLisle is a Partner in the firm and a member 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.

By: Edward T. DeLisle, Kayleen Egan & Maria L. Panichelli

Is the Small Business Administration’s (“SBA”) minority business development program, also known as the “8(a) Program”  unconstitutional?   The legality of the program has been a hot topic of debate over the year, most recently due to a significant DC District Court case.  That case, Rothe Development Inc. v. U.S. Department of Defense et al., C.A. 1:12-cv-00744, began in 2012 when Rothe Development, Inc. (“Rothe” or “the Company”) filed suit against the Department of Defense (“DOD”) and the SBA, claiming that the 8(a) program violates the Fifth Amendment due process clause.

Scale & Book

The Company argued that race-based laws are constitutional only when they’re narrowly tailored to address a historic wrong.  Claiming that there was not sufficient evidence of historic discrimination in federal contracting, Rothe argued that the DOD and the SBA did not have a compelling government interest justifying the racial classification of businesses.  Rothe further argued that the remedial effect of the 8(a) program was speculative, and that the 8(a) program was not narrowly tailored to remediate discrimination.   According to the company, the government was increasingly setting aside contracts for minority-owned or minority-controlled businesses, and the 8(a) program unfairly prevented it from competing for those contracts by giving companies owned by members of disadvantaged racial groups an unconstitutional advantage.

In May of this year, two conservative interest groups, the Pacific Legal Foundation (“PLF”) and the Mountain States Legal Foundation (“MSLF”),  joined in, filing amicus briefs. These groups argued that the 8(a) program unconstitutionally deprived Rothe (and similarly situated companies) equal protection under the law, in violation of the Due Process Clause of the Fifth Amendment.  Therefore, the NAACP Legal Defense and Educational Fund, Asian Americans Advancing Justice and the Leadership Conference on Civil and Human Rights fired back, filing their own amicus briefs and arguing that Congress was justified in enacting the 8(a) Program because discriminatory policies and practices have prevented the business development of minority entrepreneurs throughout our nation’s history.

The case now sits before the DC District Court on cross-motions for summary judgment, prompting small business insiders to wonder if Rothe will successfully lodge yet another challenge to minority owned businesses. That’s right, Rothe has filed numerous suits challenging the constitutionality of  small business programs over the past few years, most recently Rothe Development Corp. v. U.S. Department of Defense, where Rothe successfully challenged a practice employed by DOD, NASA and U.S. Coast Guard to adjust prices by up to 10 percent to assist “small disadvantaged businesses” and to help the agencies meet the small, disadvantaged contractor goal.  Rothe also previously intervened in a case filed by DynaLantic Corp., which protested the DOD’s decision to set aside a contract for military simulation and training services for minority-owned businesses.  In that case, a D.C. District judge ruled that the 8(a) program was generally constitutional, but found that the DOD couldn’t use the program in the context of military simulation contracts because there was no evidence of discrimination in that industry.

Indeed, over the past few years, the federal courts have dealt two significant blows to government programs designed to increase the amount of contracts awarded to minority businesses.  If the latest Rothe challenge is successful, it would be a huge blow to such programs.  Considering almost 16 billion dollars in federal contracts were awarded to 8(a) contractors in 2012, this ruling could significantly change the way government contracts are awarded.   We will keep you posted as this case progresses.  Stay tuned for more updates.

Edward T. DeLisle is a Partner in the firm and a member of the Federal Contracting Practice Group.

Maria L. Panichelli is an Associate in the firm’s Federal Practice Group.

Kayleen Egan is a Summer Associate at Cohen Seglias.

Teaming is a concept much discussed in the world of federal contracting, yet it is often misunderstood.  

On May 7, 2014 Maria L. Panichelli hosted a webinar for Women Impacting Public Policy (“WIPP”) and Give Me 5 (“GM5”) entitled “There’s No “I” In Team – Understanding How to Effectively Team on a Federal Project.” In it, she discussed the benefits of teaming (from both a small business/prime contractor perspective, and a large business/subcontractor perspective), the proper procedures for forming a teaming agreement, important clauses, common pitfalls, and recent developments in the applicable regulations and case law. You can watch and listen to the hour- long presentation here.

Please visit the GM5 website for information about Maria’s additional upcoming WOSB/EDWOSB webinars.

Edward T. DeLisle is a Partner in the firm and a member of the Federal Contracting Practice Group. Maria L. Panichelli is an Associate in the firm’s Federal Practice Group.

On February 18, 2014, I hosted a webinar for Women Impacting Public Policy (“WIPP”) and Give Me 5 (“GM5”) entitled “Building a Compliant WOSB/EDWOSB.” It dealt with avoiding and defending against protests and eligibility examinations relating to size, ownership and control. You can watch and listen to my hour- long presentation here.

Please visit the GM5 website for information about my additional upcoming WOSB/EDWOSB webinars. Topics will include Teaming and Joint Venturing, Recent Updates to the Small Business Programs, and more.

Maria L. Panichelli is an Associate in the firm’s Federal Practice Group.

On November 25th, the DOD, GSA and NASA issued a final rule incorporating a new clause into the FAR regarding accelerated payments to small business subcontractors on Government projects. The new rule, which takes effect December 26, 2013, requires large business prime contractors receiving accelerated payments from the Government to, in turn, accelerate payments to all of their small business subcontractors. The purpose of the new clause is to ensure that small business subcontractors are paid as promptly as possible.

The clause will be inserted into all new solicitations and resulting contracts issued after the effective date, including those contracts for the acquisition of commercial items. Unfortunately, the rule does not create any new remedies, where accelerated payments must be issued and they are not. Under such circumstances, the Government can discontinue accelerated payment to the prime contractor, but nothing more.

One interesting aspect of the new rule is that large business prime contractors cannot prevent their small business subcontractors from speaking to the contracting officer about the status of payment. Subcontract Agreements often state the exact opposite. Prime contractors typically do not want their subcontractors asking the contracting officers questions of any kind, let alone questions regarding payment. While this is certainly understandable, by virtue of the new rule, large business prime contractors will not have the same legal support for their position.

There’s not a lot to sink your teeth into here. However, the fact that small business subcontractors can go right to the contracting officer about payment issues without fear of legal retribution is at least something. If you have any questions about this, or other, aspects of the new rule, please contact us. The information contained above was reported yesterday by Law360.

Edward T. DeLisle is a Partner in the firm and a member of the Federal Contracting Practice Group.

Amy Kirby is an Associate in the firm’s Federal Practice Group.

Many of you are already familiar with the Department of Veterans Affairs’ Vets First Program. That program, created in 2006 through the enactment of the Veterans Benefits, Health Care and Information Technology Act of 2006, allows the VA to set-aside certain contracts for SDVOSB and VOSB concerns. The intent of the VA’s Vets First program is “to increase contracting opportunities for small business concerns owned and controlled by veterans with service-connected disabilities.” This goal is accomplished by favoring SDVOSB and VOSB companies over other disadvantaged groups when the VA sets aside a procurement for small business. In its first seven years, the program has resulted in tens of millions of dollars in contracts for SDVOSB and VOSB companies.

Clearly recognizing the many benefits of the VA’s program, Congress is looking to expand it. On June 14, 2013, Rep. Michael Fitzpatrick (R- Penn.) introduced, and the House unanimously passed, an amendment to the National Defense Authorization Act of 2013. If enacted, this amendment would require the Department of Defense to perform a study analyzing the potential benefits of adopting its own “Vets First” Program. The amendment directs DoD to work with the SBA and the VA for purposes of developing a report detailing “the impacts of Department of Defense contracting with [VOSBs and SDVOSBs] on veteran entrepreneurship and veteran unemployment,” among other things. First, however, the bill must gain Senate approval. SDVOSB contracting has received much attention over the last several years, so it will be interesting to see what happens in the Senate. We will keep you posted on the progress of the amendment.

Edward T. DeLisle is a Partner in the firm and a member of the Federal Contracting Practice Group.

Maria L. Panichelli is an Associate in the firm’s Federal Practice Group.