Small Business Contracting

On December 3, 2018, the Department of Defense (DoD) issued a deviation from the FAR’s self-performance requirements, which applies to subcontracting limitations on contracts set aside for small businesses. Although the changes to subcontracting limitations were mandated by the 2013 National Defense Authorization Act (yes, 2013), implementation has been slow and piecemeal. The Small Business Administration (SBA) did not implement the changes until June 2016, and although the FAR Council recently issued a proposed rule that would bring the FAR into compliance, the FAR has not officially caught up. In the meantime, the discrepancy between the FAR and the SBA regulations has caused headaches for contractors who must decide whether to comply with the FAR, the SBA regulations, or both. The DoD’s deviation will bridge the gap for all DoD contracts until the FAR catches up. 
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When an agency decides to set aside an acquisition for participation only by small businesses, certain subcontracting limitations apply to the small business awardee. For construction contracts, the small business contractor cannot pay subcontractors more than 85% of the amount they receive from the agency. For service and supply contracts, the small business contractor cannot pay more than 50% of the amount paid to it by the agency to other entities that are not similarly situated. Work performed by similarly situated entities is not considered in determining if the limitation on subcontracting is violated. A similarly situated entity is defined as a small business subcontractor that is a participant of the same small business program as the prime contractor and is small for the NAICS code assigned by the prime contractor to the subcontract.

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The Small Business Administration (SBA) and the Department of Veterans Affairs (VA) finalized new regulations, effective October 1, 2018, that govern eligibility to obtain contracts that are set aside for veteran-owned small business and service-disabled veteran-owned small business (collectively, “(SD)VOSB”). The regulatory changes are intended to improve coordination between the VA’s “Vets First” program, which covers (SD)VOSB set-asides issued by the VA, and the SBA’s program, which covers (SD)VOSB set-asides issued by all other government agencies.

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Last week, I attended the ChallengeHER event in Arlington, VA where I had the pleasure of meeting other females in federal contracting. ChallengeHER events, which are organized by Women Impacting Public Policy (WIPP), the U.S. Small Business Administration (SBA), and American Express (AMEX), are designed to supply women business owners with information and resources regarding the SBA’s Women-Owned Small Businesses (WOSB) Program in order to provide more federal government contracting opportunities for small businesses owned by women.

One thing was made clear at the event – federal agencies, including the Department of Defense (DoD), are indeed striving to achieve their goals of awarding 5% of their prime contracting dollars to WOSBs. Ms. Amy Kim, the SBA’s WOSB Program Manager, informed attendees that although federal agencies fell just shy of meeting the 5% goal in FY2017, they did award $20.8 Billion contracting dollars to WOSBs. While this number also includes contracting dollars awarded to WOSBs under other SBA socio-economic programs, it was encouraging to learn that FY2017 saw $723.5 Million in WOSB set-aside contract award dollars, which is a 60% increase from FY2016! Several representatives from the DoD discussed how the number of set-aside contract award dollars can continue to increase.
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Effective May 25, 2018, the Small Business Administration (“SBA”) amended its regulations regarding a contractor’s size and/or socio-economic status following a novation, merger, or acquisition. Specifically, through a “technical correction,” the SBA revised its regulations to dictate that when a company becomes “other than small” or no longer has a certain socio-economic status (veteran-owned, woman-owned, HUBZone, etc.) as a result of a novation, merger, or acquisition, the business is no longer eligible to compete for set-aside task orders on multiple-award contracts held by the company. This change in eligibility is applicable even where the contracting officer does not specifically request a recertification. 
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Hand with megaphoneHello from Nashville, Tennessee! I’m currently at the National 8(a) Association’s Winter Conference and had the privilege of participating in a great panel discussion with some of the leading small business scholars and practitioners in the country. It was truly a great experience. Since I’m here and it’s fresh on my mind, I thought I’d share something that all SDVOSBs should know: Your world is about to change.

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Cohen Seglias Co-Chair of the Federal Contracting Group, Edward DeLisle, testified at a Small Business Committee hearing titled, “All Work and No Pay: Change Orders Delayed for Small Construction Contractors.” The hearing examined the effects of change orders on small business contractors and potential solutions to alleviate the financial burden on small businesses caused by agency delay in approval and payment of change orders.

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Event Flyer

Women in Defense, Georgia Chapter presents Cohen Seglias attorneys Maria Panichelli and Amy Kirby in a 3-part educational webinar series for WOSBs, SDVOSBs, and other small businesses.

February 22, 2017 – The Perks, Procedure, & Common Pitfalls of Federal Small Business Program Eligibility & Certification: Recording Available

March 22, 2017 – Teaming Arrangements, Joint Ventures, and Mentor-Protégé Relationships

April 19, 2017 – Protests and Size/Eligibility Investigations


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This is the third and final installment in a series of articles brought to you by Maria L. Panichelli and Edward T. DeLisle for GovBizConnect, an online professional network for government contracting professionals. 

Originally published on the GovBizConnect website.

Welcome to the third and final installment of our three-part series, Key Considerations in Small Business Teaming: How to Form a Productive Partnership While Safeguarding your Interests and Protecting your Small Business Eligibility. Today, we will be focusing on crucial concepts to keep in mind when drafting your teaming agreement. But check out our previous installments on: (1) the differences of teaming and joint venturing; and (2) avoiding common pitfalls in teaming. Stay tuned for our upcoming piece on the new “All Small” Mentor Protégé Program.

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This is the second in a series of three articles brought to you by Maria L. Panichelli and Edward T. DeLisle for GovBizConnect, an online professional network for government contracting professionals. 

Originally published on the GovBizConnect website.

Welcome to the second installment of our three-part series, Key Considerations in Small Business Teaming: How to Form a Productive Partnership While Safeguarding your Interests and Protecting your Small Business Eligibility. You can read Part I here. Today, we will be focusing on how to avoid common pitfalls in teaming. But check out our previous installment on the differences of teaming and joint venturing, and stay tuned for our final installment, which will address how to draft an enforceable teaming agreement that will protect your interests as a small business.
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