Legal Meets Practical

In general, I feel like I’m fairly even-handed in how I discuss the U.S. Department of Veterans’ Affairs’ (VA) Center for Verification and Evaluation (CVE), which processes applications for inclusion in the VetBiz Registry (You must be recognized as a veteran-owned business in this registry to compete for VA set-aside work). The process is still undergoing growing pains, which I understand; but it has also back-pedaled recently with some of its recent “improvements” (to include the implementation of a new bifurcated process, which unnecessarily adds a step to the process). I generally cover any update with the CVE, since a lot of my readers are veteran business owners who are listed in the CVE’s VetBiz registry and depend on VA set-aside work for their livelihood.

One topic I’ve bitten my tongue on – for some time now – is the verification statistics the VA posts on its website. Finally, I’m going to say something: in my opinion, these statistics are misrepresentations, and veteran business owners should not be putting any stock into them when seeking either verification or reverification in the VA’s VetBiz Registry. They should assume the process should take at least three months, and carve out the time accordingly. They should also completely ignore the “success rate.”

First of all, the VA is claiming that there is a 99% success rate in verification (through June 2016). This figure is not real (at all), because it does not include veterans who withdraw their applications when the CVE determines they are ineligible, rather than receive denials. Because no one in their right mind would say “sure, send me a denial letter” this means that NO ONE elects that decision, so hardly anyone receives a denial to be counted.

The only reason why the 1% denial rate exists (as opposed to 0%) is because those veterans didn’t receive the email and didn’t elect that option in time. Or maybe they were so fed up by the process that they never responded and therefore received a denial by default.

Second of all, the VA is claiming that it only takes 42 days for verification, and 31 days for reverification. Where on earth is the VA getting this estimate? Is it only counting Tuesdays and Thursdays? (As a note, the statistics don’t specify whether these are in business days or calendar days). Especially recently, I have seen applications languish in one stage for weeks, even when the application should have no issue with moving forward and/or getting approved.

The statistics homepage provides a clue as to how the VA is able to manipulate that number. It says that the clock only starts running once a “complete” application is received. That means that the business has to get through the Initiation stage, which is the first stage where the CVE checks an application for “completeness” and then moves it along to the Examination stage.

“Completeness” doesn’t mean that an application contains all the basic required documentation. It means that an application has also submitted anything else the CVE feels is necessary for it to evaluate for eligibility, which isn’t necessarily on the required documents list. The CVE can take its time getting to an application in this first stage; then, once the veteran business owner has submitted any additional information, take its time again in marking the application as “complete” and putting it in the Examination queue. Then the clock starts running. That means there can be up to an entire month unaccounted for in the processing time (perhaps more). Not only that, but the VA stops the clock every time it asks for additional documentation (until it is uploaded and submitted by the business owner).

If the CVE needs to take 80 or 90 days to process applications – which I believe is a more accurate figure – that’s understandable. It takes time to verify eligibility (which we want to be done correctly), and resources are limited. However, the CVE claims a processing time that is less than half the real figure; and it also grossly skews its approval rate by not counting the many businesses who withdraw due to frustration with document requests or eligibility issues. This misrepresents to veteran business owners what to expect during the verification process, and this runs contrary to the CVE’s goal of helping veteran business owners.

What do you think? If you have an experience to share – positive or negative – that touches on wait times (or other VetBiz issues such as document requests), please leave a comment!

*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veteran business issues at: https://legalmeetspractical.com.

Are the statistics for VA VetBiz applications laughable?

In a final rule published in the Federal Register on July 25, 2016, the SBA provides the framework for what may be one of the most important small business programs of the last decade–one that will allow all small businesses to obtain developmental assistance from larger mentors, and form joint ventures with those mentors to pursue set-aside contracts.

The SBA’s final rule creates a new regulation, 13 C.F.R. 125.9, entitled: “What are the rules governing SBA’s small business mentor-protege program?” The new regulation sets forth the framework of the small business mentor-protege program. It also sets out the major benefit to being in a mentor-protege relationship: A protege and mentor may joint venture as a small business for any government prime contract or subcontract, provided the protege qualifies as small for the procurement. Such a joint venture may seek any type of small business contract for which the protege firm qualifies (e.g., a protege firm that qualifies as a WOSB could seek a WOSB set-aside as a joint venture with its SBA-approved mentor).

In plain English, this means that if you are a small business in a good business relationship with a larger business with complementary capabilities and strong past performance, you could team up to take advantage of your socioeconomic status on set-asides. You just need to be willing to do the dance with the SBA to get your mentor-protege relationship approved.

So. . . who can be a mentor, and who can be a protege? 

As a general matter, “[a]ny concern that demonstrates a commitment and the ability to assist small business concerns may act as a mentor and receive benefits ” from the mentor-protege program. Mentors may be large or small businesses – the key is whether they have the good financial health and character to successfully guide their proteges.

To qualify as a protege, a company “must qualify as small for the size standard corresponding to its primary NAICS code or identify that it is seeking business development assistance with respect to a secondary NAICS code and qualify as small for the size standard corresponding to that NAICS code.” However, if the prospective protege is not a small business in its primary NAICS code, “the firm must demonstrate how the mentor-protege relationship is a logical business progression for the firm and will further develop or expand current capabilities.” Further, “SBA will not approve a mentor-protege relationship in a secondary NAICS code in which the firm has no prior experience.”

What is the mentor-protege agreement?

In order to participate in the mentor-protege program, “[t]he mentor and protege firms must enter into a written agreement setting forth an assessment of the protege’s needs and providing a detailed description and timeline for the delivery of the assistance the mentor commits to provide to address those needs . . ..” The mentor-protege agreement must provide that the mentor will provide assistance to the protege for at least one year. However, the agreement must also provide “that either the protege or the mentor may terminate the agreement with 30 days advance notice to the other party . . . and to SBA.” The written mentor-protege agreement must be approved by the SBA before it takes effect. Additionally, the SBA “must approve all changes to a mentor-protege agreement in advance, and any changes made to the agreement must be provided in writing.” A single mentor-protege agreement may not exceed three years, but it may be extended for a second three years.

What is the application process? 

On October 1, 2016, the SBA will begin accepting applications for the new universal small business mentor-protege program. Applications will only be accepted through the SBA’s new certify.sba.gov portal, and it is unclear whether the SBA will choose to cap the number of applicants to the program.

Applicants are required to register in the System for Award Management (SAM) prior to creating their profile in certify.sba.gov. Applicants (both prospective Protégés and Mentors) will be required to complete an online training module as part of the application process, and to upload a certificate of completion to certify.sba.gov before they are allowed to complete the application process.

The application itself will be entirely electronic, and will require that certain documents – certificate of completion for the online training module, signed Mentor-Protégé agreement(s), size determination letters, and other documents – be uploaded to certify.sba.gov, or completed in narrative form within that web portal. Although Mentors are not required to provide financial statements and tax returns during the application process, the SBA retains the right to request such documentation during the reporting and evaluation processes. For further information, go to the SBA’s website for the small business mentor-protege program.

What do you think? What kind of logistical problems do you foresee in the application process? After all, this is brand new. Also, are there any issues the SBA should consider when implementing this new program?

*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veteran small business issues at: https://legalmeetspractical.com. Remember to click the link sent to your email to activate your subscription!

As of October 1, only the SBA approves mentor-protege applications. Absent special statutory authority, a agency can no longer operate its own mentor-protégé program, unless: 1) the agency submits a program plan to the SBA, and 2) receives approval of the plan within one year of the SBA’s mentor-protégé regulations finalization.

As we know, in late June, the U.S. Supreme Court sided with veterans in holding that in some cases, the U.S. Department of Veterans Affairs (VA) is required to set aside certain pieces of work for veteran-owned small businesses (VOSBs).

Almost immediately, the VA issued an Acquisition Policy Flash, which reiterates the Supreme Court’s major holdings: namely, that the Rule of Two applies to orders placed under the GSA Schedule, and applies even when the VA is meeting its SDVOSB and VOSB contracting goals. (As a refresher, the “Rule of Two” is that the work has to be set aside for veteran companies when there is a “reasonable expectation” that at least two such businesses will bid on the contract and “the award can be made at a fair and reasonable price that offers best value to the United States.”). The Policy Flash states that the VA “will implement the Supreme Court’s ruling in every context where the law applies.” It also instructs contracting officers to conduct robust market research to ensure compliance with the Rule of Two.

More recently, the VA issued further guidance on the implementation of the Kingdomware decision, in the form of a memorandum that describes the changes to the Veterans Affairs Acquisition Regulation (VAAR). It juxtaposes the old policies contained within the VAAR, compared with the new policies adopted due to the Supreme Court’s holding related to the Rule of Two.

Notably, the memorandum enumerates the changes to the VAAR (at 810.001-70) as it relates to the market research contracting officers must conduct in determining whether a contract should be set aside for the veteran community:

*Did you find this article informative? If so, sign up for Sarah Schauerte Reida’s legal blog on veteran issues at: https://legalmeetspractical.com. Remember to click the link sent to your email to activate your subscription!

UPDATE: Via a release issued today (August 5), the CVE has shortened the announced “down” time by one week. According to the latest news, the system will only be on hiatus until Monday, August 15th. This is good news for those going through reverification and getting close to expiration.

For those of you who are going through the reverification or verification process to be included in the U.S. Department of Veterans Affairs’ (VA) VetBiz Registry (its database of small business contractors eligible for veteran-owned and service-disabled veteran-owned set-asides), you might want to get a move on.

Commencing at 8:00 a.m. on Thursday, August 11th, and ending at 8:00 a.m. on Monday, August 22nd, the VetBiz system will be down. During this period, firms will not have access to their profiles and the CVE will not be able to process applications. Firms will not be able to commence the reverification process or submit a change request to modify any aspect of the firm’s profile/status. Additionally, the CVE will be unable to accept new verification applications.

In a notice sent out in mid-July to firms already in the VetBiz Registry, the CVE encouraged firms whose eligibility expires before October 15, 2016 – and firms that desire to update their information – to take action as soon as possible, as the CVE will not grant any extensions of eligibility due to this temporary hiatus.

This comes at an unfortunate time, as this is the end of the Government’s fiscal year, when contract solicitations and awards increase. Also, the notice was sent out only three weeks in advance of the hiatus.

So, why the need? According to the email blast: “The VA Veterans First verification program is undergoing a transformation in response to feedback provided by Veteran-owned Small Businesses. The modifications and enhancements will result in significant changes to our application process to improve the Veteran experience as we establish “My VA Verification.””

I’m not sure if the explanation given could be more vague, but I did some digging to find out what constitutes “My VA Verification.” Apparently, the VA is changing the examination phases of the application process, now requiring firms to go through a “pre-qualification” stage before undergoing a comprehensive evaluation.

As an attorney who regularly assists with these applications, I will say I’m not too thrilled with this development. A few years ago, the CVE was making some serious headway in making the application process easier; but requiring a company to go through both “pre-qualification” and an actual examination amplifies the work and complexity for both the CVE and the firm. Also, for those who have gone through the process already, and learned from trial and error, they might not be too happy to now have to master another process.

There are good intentions here, but we’ll see about execution. If you want to take a look at My VA Verification and offer your comments below based on your experience, please chime in!

*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veteran issues at: https://legalmeetspractical.com.

While my blog’s focused on veterans, this is one issue that can affect anyone with a phone and a social security number.

Recently, scammers have taken to calling individuals under the guise of being “officers employed by the Internal Revenue Service.” Initially, not even a live person calls – even if you pick up the phone, you’re treated to a one-minute recording where you’re told to call back the number. They also threaten the following:

“The IRS has issued an arrest warrant on you. Right now, you and your physical property both are being monitored. And it’s very important that I do hear back from you as soon as possible before we proceed further in any legal matter,” the voicemail says (or some variation thereof).

There are a few things wrong with this assertion:

1. There are no officers with the IRS who would be criminally prosecuting you. It’s not the IRS who arrests/investigates those engaged in tax fraud – it’s the U.S. Department of Justice (though investigations start with an IRS special agent).
2. If a U.S. government agency was prosecuting you, they wouldn’t initiate the matter by calling you and leaving a voicemail.
3. If the IRS suspected you of tax evasion/fraud, they’d send you written correspondence first.
4. The IRS would never make the threats contained in the voicemail, such as representing it will send local law enforcement agents to your door or levy your property.

If you do get on the phone with “Officer X,” he will try to scare you into asking for personal information such as debit card information and social security numbers. Hopefully obviously, never give that kind of information to a stranger on the phone! Especially not to a Special Human like this. Honestly, now – this isn’t even a smart scam.

I received such a call today, and when I Googled “IRS phone scam,” I found that this is a very recent phenomenon. If you find yourself at the receiving end of a call like this, you can add your number on the National Do Not Call List at http://www.donotcall.gov. Also, report the details and the phone number that called you by emailing [email protected]. (The number that called me was 254-488-6064).

Like dealing with the IRS isn’t stressful enough. We don’t need to be dealing with an IRS phone scam, too.

*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veteran issues at: https://legalmeetspractical.com.

       Don’t give this dummy your money!

Considering how long it takes – and how hard it can be – to make the U.S. Department of Veterans (“VA”) fork over rightfully-deserved disability benefits, this story, released via a VA press release, is mind-boggling:

On June 30th, Bruce A. Endicott, 34, pled guilty in federal court to theft of government funds, and admitted he committed the theft over a course of more than three years.

According to court records, Endicott began receiving service-connected disability benefits through the VA in 2005.

In June 2012, Endicott filed an additional claim with the VA for Individual Unemployability (“IU”) benefits, claiming he was unemployed and unable to be employed due to his service-connected disabilities that included physical and mental impairments. Endicott also submitted a statement to the VA in February 2013, that stated he had not worked within the past 12 months.

In fact, Endicott was currently working at the Oregon Department of Justice under a second social security number that he had not disclosed to the VA. Based on Endicott’s false statements and concealments, the VA awarded him additional benefits and advised him to notify the VA immediately if he became employed.

Endicott left the Oregon Department of Justice in December of 2013 and began working for the Deschutes County District Attorney’s Office. He again failed to notify the VA he was working.

After Endicott left the District Attorney’s Office in May 2014, he applied for welfare benefits through the Oregon Department of Human Services (DHS), using the second social security number and claiming to have no income. Endicott failed to disclose to DHS that he was receiving approximately $2,700 per month in VA benefits. DHS awarded him Supplemental Nutrition Assistance Program (SNAP) (formerly known as food stamps) and Temporary Assistance to Needy Family (TANF) benefits.

In February 2015, Endicott submitted a statement to the VA regarding his IU claim, in which he failed to disclose his former employment with the Deschutes County District Attorney’s Office, and asserted that he had not worked in the past 12 months. Consequently, the VA continued to pay his IU benefits.

Between June 2012 and October 2015, Endicott received approximately $47,947 in IU benefits, $5,996 in SNAP benefits, and $2,770 in TANF benefits to which he was not entitled. As a consequence of these transgressions, which were eventually discovered and prosecuted, he entered into a plea agreement stating that the government will seek a 30-day term of imprisonment. (A federal district judge will determine his actual sentence).

Notably absent from the VA’s press release is a mention of the money. If Endicott has managed to exchange 30 days in prison for this amount, this means that this is $55,000 down the drain – money that could have gone toward veterans actually entitled to service-connected compensation. This is an insulting conclusion to a saga that has surely already cost taxpayers tens of thousands of dollars in investigatory and legal process fees.

It is also a baffling one. Ask most veterans who have applied for disability benefits, and they will recount stories of years-long delays and their perception that the VA presumes they are not entitled to their benefits until they prove otherwise. So, then, how did Endicott manage to game the system?

Maybe this just came down to a technicality with the differing social security numbers. But Endicott’s game is now over, and no one won.

*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veteran (and veteran small business) issues at: https://legalmeetspractical.com.

Last Monday, my husband and I packed up our car (and the dog, of course, as he is the Legal Meets Practical mascot!) and headed for Norfolk for the National Veteran Small Business Coalition’s (NVSBC) annual conference (VETS 16). I spent three days not only participating in the various conference activities (and presenting on VA VetBiz verification and bid protests), but also observing the crowd and listening to the NVSBC discuss its role in the procurement process. This emphasized it has a role – a big one. The NVSBC is highly respected by the same agencies its members get business from, as demonstrated by the following example:

Every veteran business owner has heard of Kingdomware. (And if you haven’t, just go here).  The Thursday before last, the Supreme Court handed down a unanimous verdict in favor of Kingdomware (and veterans), which means the VA must show preference to veteran businesses competing on federal schedule contracts. When this happened, Tom Leney, the Director of the the VA’s Office of Small Disadvantaged Business Utilization (i.e, a VA head honcho), called Scott Denniston, Executive Director of the NVSBC, and asked to speak at VETS 16 (which was the following week). Mr. Leney had also attended VETS 15. Mr. Leney ultimately could not attend this year because of Congressional hearings, and Scott defended this cancellation during a conference luncheon, explaining that Mr. Leney has to testify as the small business representative before Congress as our advocate. Love him or hate him, Mr. Leney is “our guy,” and Scott did a wonderful job of  conveying that point.

This is why the procurement and government officials respect the NVSBC. For some groups or individuals, the VA can’t do anything right, ever, and that kind of attitude is counterproductive. The NVSBC, however, has always been good about recognizing the limitations of government and working with officials to make things better. For example, even though the four-year Kingdomware saga was extremely frustrating (maddening), the NVSBC respectfully and professionally presented its position (the NVSBC submitted an amicus curiae – “friend of the court” – brief to the Supreme Court), all the while zealously advocating on behalf of veterans.

Here’s the point. As veteran business owners, or veterans, it’s easy to get angry at the VA. It is a fact, not an opinion, that our veterans deserve better than what the VA has been delivering. But here’s the thing – if a veteran’s recourse is to rant and rave via a LinkedIN post constituting fifty lines, or to write angry letters to his Congressperson, bashing the VA, it doesn’t help. Not because what is being said isn’t true, but because it isn’t productive.

The NVSBC is productive. It celebrates the good work agencies do (at the award luncheon at VETS 16, it handed out awards to agencies and primes that met small business goals); and when it has an issue, it addresses it rationally and professionally. That is why Tom Leney personally reaches out to Scott Denniston, as opposed to dodging his calls. The NVSBC’s view might not always be aligned with the VA’s, but because it is respectful and ultimately has the same goals as the VA (serving the veterans!), it is an organization with weight and deserved influence in the federal arena.

If you want to be a veteran advocate, the best way to serve that purpose is by trying to work with the VA and not against it. I try to do that (despite my occasional colorful blog posts), and I feel I get farther because of it. As hard as it may be – and feel free to say what you want to others who understand your VA-related frustration – there’s no denying you get more by contributing to the solution rather than merely identifying the problem. It’s true with anything, and it’s true with the VA.

*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veteran issues at: https://legalmeetspractical.com.

“PC load letter?!?!” – Office Space

A client forwarded me the email with this decision, and here I am thirty seconds later, writing a blog because it is necessary that the entire veteran business community knows they’ve been vindicated! We have won the Kingdomware case!

Today, June 16, the United States Supreme Court, by a unanimous vote, ended a four-year long battle (that began at the GAO) holding that the VA is mandated to set aside contract opportunities for veteran-owned businesses on the Federal Supply Schedule when the “rule of two” is met – that the contracting officer has a reasonable expectation that two or more veteran-owned businesses will bid on the work, and offer a fair and reasonable price. Applying legal rules of statutory construction, the Supreme Court sided with veteran businesses in holding that key language (“shall”) was mandatory in requiring the VA to honor the preference.

This is a huge victory for veteran business owners who rely on the Federal Supply Schedule for a chunk of their federal (VA) work. The mandatory preference means that automatically, the VA will have to give the work to veteran-owned businesses rather than competing it in full and open competition (i.e., with the “big guys” thrown in the mix).

I am a member (and huge fan) of the National Veteran Small Business Coalition, which submitted an amicus curiae brief on the matter, and I’m sure that Kingdomware will be THE topic of discussion at our conference next week in Norfolk. (Registration is still open, for those who are interested in going to one of the best veteran business conferences out there).

What a development! Access the full decision here.

*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veteran issues at: https://legalmeetspractical.com.

When it comes to vet-related news, I try to distill it as much as possible. No one wants to read a long article, especially when you can get the message in a short one. It’s like squeezing juice from an orange – you get the good stuff, and leave the rest. This week, here’s the good (actually, bad, in many instances) stuff:

• Firings in Wake of Phoenix Scandal. Remember that scandal? Three more administrators at the Phoenix VA Health Care System have been fired in the aftermath of investigations that focused on a breakdown in service to veterans and retaliation against hospital employees who tried to report mismanagement and corruption affecting patient care. All “higher-ups,” they were removed for “negligent performance of duties and failure to provide effective oversight” according to a VA press release. They have the right to appeal, and based on what happened with Kimberly Graves and Diana Rubens, I’m sure they’ll be reinstated, as well as receive back pay. And a pony.

• VA Proposes Coverage for Gender Reassignment Surgeries. The VA is proposing a rule change to begin covering sex-reassignment surgeries and other related medical treatment for transgender veterans. The proposed rule change, announced on the Executive Office of the President’s website, would allow veterans to apply for medical services to change their sex, including surgery, to be determined on a case-by-case basis. Coming in the wake of fights over transgender bathroom rules, the VA has noted that: “Recent medical research shows that gender dysphoria is a serious condition that has had severe medical consequences for certain patients if transition-related surgeries and procedures are not provided.” (Note, however, that the VA has not yet formally proposed the rule).

• Senate Blocks Vote to Fund Military Fertility Program. In January, a pilot program began that allowed U.S. troops to freeze their sperm and eggs before deployment. The goal is to give those in uniform the peace of mind that if they are hurt on the battlefield, they can still have children; as well as to encourage women to stay in the military longer. This week, however, the Senate voted 85-13 to approve a $602 billion military spending bill for 2017 that stripped funding for the program.

• Vet Accused of “Gaming” Set-Aside Program Now Stands Trial for Murder. Remember a few years ago, when Tammy Duckworth berated Braulio Costello before Congress for abusing the SDVOSB set-aside program? (This one is worth re-reading). Costello’s trial for the murder of his wife, who had a protective order against him and was the mother of his five children, began on May 20 in Loudoun County.

• Thousands of Living Vets Declared Dead and Lost Benefits Over Last Five Years. The VA has mistakenly declared thousands of veterans to be deceased and canceled their benefits over the past five years, a new snafu to emerge at the embattled department. According to The Wall Street Journal, The VA has made the error more than 4,000 times over a half-decade because of employee mistakes or erroneous cross-checking of data by the department’s computers, among other reasons. More details will emerge in the weeks to come.

There you have it! The “juicy” news, squeezed, so you don’t have to drink the whole glass. (Though, if you’re like me, reading most of this will make you bitter, too).

*If you found this article informative, please sign up for Sarah Schauerte’s legal blog on veteran issues at: https://legalmeetspractical.com.

**Also, while this is unrelated to veteran news, if you are a parent or grandparent (or just someone who would like to read a book promoted as “Jumanji with monsters”), sign up to win a free advanced release copy of Monsterville: A Lissa Black Production, here. Sarah’s book makes its debut on September 6, 2016, and please feel free to share the page link! 

Your VA news, distilled and squeezed for easy reading.

• 
  Read more here: http://www.mcclatchydc.com/news/politics-government/congress/article83811887.html#storylink=cpy

   

On Tuesday, May 31, the Small Business Administration (“SBA”) published a final rule in the Federal Register, amending several of its regulations to implement provisions of the National Defense Authorization Act of 2013, as well as to make changes to its regulations concerning the nonmanufacturer rule, affiliation, and joint ventures. It isn’t the most interesting piece of reading you’ll ever encounter, but given its wide scope, it might be worth checking out to see if and how it affects how your small business.

Here are a few of the highlights:

• Affiliation. The rule clarifies that one firm will be presumed to be “affiliated” with another for purposes of determining size if the concern in question derived 70% or more of its receipts from another concern over the previous three fiscal years (consistent with case law from the SBA’s Office of Hearings and Appeals). This presumption is rebuttable. (13 CFR 121.2013).
• Annual Receipts. The rule further defines the definition of “annual receipts” (as it is used to determine size) (13 CFR 121.104). This has confused contractors and been a contentious issue in size protests.
• Nonmanufacturer Rule. The rule clarifies the nonmanufacturer rule, further stating that the rental of an item qualifies as a “service” and will be treated as such in the application of the nonmanufacturer rule and the limitation on subcontracting (“LOS”). It also notes that the nonmanufacturer rule and the LOS performance requirements do not apply to set-asides with an estimated value between $3,500 and $150,000. (13 CFR 121.406).
• Size Protest Standing. The rule clarifies standing for initiating a size protest or requesting a formal size determination, stating that this includes “any offeror that the contracting officer has not eliminated from consideration for any procurement-related reason, such as non-responsiveness, technical unacceptability, or outside of the competitive range.” The prior language included a double negative, which was confusing even for attorneys. (13 CFR 121.1001).
• Limitations on Subcontracting. It clarifies that a prime contractor may subcontract work to a “similarly-situation” (i.e., in the same socioeconomic category) entity and have that count toward the LOS requirements. Not complying with LOS requirements is an easy way to either be found non-responsive in your offer, or to get into trouble (including such penalties as debarment), so it’s important to remain educated on this topic. (13 CFR 125.6).
• Joint Ventures. It alters the rules for joint ventures, noting that the joint venture will be considered “small” so long as each concern is “small” under the NAICS code assigned to the procurement. It also notes the joint venture’s obligation to comply with the LOS requirements set forth at 13 CFR 125.6 (13 CFR 125.15).

For a detailed account of the originally-proposed rule, the comments received and the SBA’s response/analysis, and the final rule (which goes into effect on June 30, 2016), visit this page. Remember – as a small business contractor, it’s your obligation to stay informed on rule updates!

*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veteran small business issues at: https://legalmeetspractical.com. Also, if you’re attending the National Veteran Small Business Coalition’s wonderful conference in Norfolk this year (June 20-23), please stop by for my presentations on VetBiz verification and bid protests!

Knowing the rules that apply to you can help your bottom line.