Morrison Foerster’s Government Contracts Insights provides our in-depth analysis of developments and trends impacting government contracting. Through Insights, our attorneys offer a real-time assessment of the statutory, regulatory, legal, and business-related developments and trends that are shaping the industry. We also examine a full array of non-U.S. public procurement issues, mindful that our clients compete in a global marketplace.Morrison Foerster’s nationally recognized Government Contracts and Public Procurement practice represents the world’s leading companies in the aerospace and defense, intelligence, cybersecurity, information technology, financial and professional services, education, healthcare, infrastructure, and logistics support sectors. We are enlisted to address our clients’ most complex and important legal issues. Our work includes contract and subcontract negotiation and other transactional matters, business and regulatory compliance counseling, internal investigations, bid protests, and a wide array of enforcement and litigation matters. Our clients range from Fortune 50 companies to small and medium-sized companies just entering the public sector. We advise both U.S. and non-U.S. companies involved in municipal, state, federal, and non-U.S. procurement matters.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Tina is Co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. She represents a wide variety of government contractors including information technology, defense, biotechnology, and pharmaceutical companies, with a focus on general contract counseling and compliance, particularly concerning intellectual property, and cybersecurity matters and federal grant funding.Tina counsels contractors on compliance with federal, state and local acquisition and ethics regulations and with the evolving myriad of requirements pertaining to data security and cybersecurity. She has been involved with numerous internal investigations and compliance reviews, and with mandatory and voluntary disclosures to agencies, and litigation of False Claims Act matters.Tina routinely advises clients concerning:<ul><li>Prime-subcontractor relationships</li><li>Sources of supply and country of origin requirements</li><li>Price reductions and price reporting issues</li><li>Organizational conflicts of interest</li><li>Safeguarding of intellectual property and other proprietary interests</li><li>Licensing and data rights issues</li><li>Handling of classified materials and controlled unclassified information</li><li>Agency suspension and debarment proceedings</li></ul>She also assists clients with due diligence and other activities related to the acquisition of government contracting concerns, and with the drafting and negotiation of teaming agreements, subcontracts, licensing agreements, and cooperative research and development agreements. She also assists clients applying for federal grants (including SBIR and STTR agreements), and those who seek to obtain other transactional authority agreements, as well as those competing for state and local government work.Tina’s litigation experience includes government contracts claims litigation in federal courts and before boards of contract appeals, bid protests before the Government Accountability Office and the Court of Federal Claims, and complex disputes in federal courts, including civil fraud and False Claims Act litigation and reverse Freedom of Information Act litigation.Prior to joining Morrison Foerster, Tina worked at another large national firm and as a trial attorney in the Office of the General Counsel of the Navy, Navy Litigation Office.<h4>Representative Experience</h4><ul><li>Negotiation of largest CHIPS Act federal funding agreement between multinational semiconductor corporation and U.S. Department of Commerce.</li><li>Negotiated prime contract and major subcontracts related to the Department of Energy’s next generation supercomputer program, including extensive IP rights negotiations and negotiation of associated patent rights waivers.</li><li>Negotiated series of other transaction authority agreements with DARPA and associated subcontracts with more than a dozen research universities on behalf of a firm biotech client, including complex IP rights allocations and material transfer agreements.</li><li>Assist clients with FedRAMP authorization process and with development of license agreements for software products sold to federal, state and local government agencies.</li><li>Cyber incident response counseling to some of the largest companies and organizations impacted by security incidents.</li><li>Advises clients on Bayh-Dole reporting of inventions and IP strategies for contracts and grants.</li><li>Conducts due diligence for major government contract mergers and acquisitions.</li></ul>

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Our government contracts and procurement attorneys counsel businesses on legal and compliance issues encountered when doing business with government entities.

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Tina is co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. She counsels a wide variety of government contractors on compliance with federal acquisition and ethics regulations. She drafts and negotiates contracts on their behalf and has been involved with numerous internal investigations and compliance reviews, and with bid protest, contract claims, and False Claims Act litigation. She also advises on M&A transactions involving government contractors.

Tina D. Reynolds

Jim Tucker is of counsel in Morrison Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office.Jim’s practice runs the gamut of litigation and counseling in federal procurement matters, with an emphasis on bid protests, Cost Accounting Standards disputes, and small business matters. He has represented both protesters and awardees in scores of protests before the Government Accountability Office, the Court of Federal Claims, and procuring agencies, in acquisitions ranging from small business procurements to multibillion-dollar contracts of global significance. His representative protest matters span the aerospace sector, the Intelligence Community, base operations and logistics, healthcare, nuclear and environmental work, and information technology and software acquisitions. His protests have included both classified and unclassified programs. In addition to prevailing in published decisions, Jim has also secured favorable corrective action on behalf of clients in a wide variety of protests that were resolved without a published decision.Jim’s work also focuses on disputes over cost allowability and compliance with the Cost Accounting Standards, and he has appeared before the Armed Services and Civilian Boards of Contract Appeals, in size and status protests before Small Business Administration (SBA) area offices, and appeals before the SBA Office of Hearings and Appeals. Jim regularly counsels clients on contract interpretation, organizational conflicts of interest, and small business compliance.Jim graduated with high honors from the George Washington University Law School, where he focused his studies on federal procurement law, was a member of the Law Review, and interned with the General Services Administration’s suspension and debarment office. Jim also holds a degree in theology magna cum laude from the Pontifical Gregorian University in Rome and a bachelor’s degree in classical languages and literature summa cum laude from the University of Kentucky, where he graduated Phi Beta Kappa.

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Jim maintains an active practice in bid protests before the Government Accountability Office and contracting agencies and counsels clients in contract disputes and compliance obligations.

Jim Tucker is of counsel in Morrison Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office. Jim’s practice runs the gamut of litigation and counseling in federal procurement matters, with an emphasis on bid protests, Cost Accounting Standards disputes, and small business matters.

James Tucker

<div style="margin-bottom: 15px;" class="videoWrapper"><iframe class="sticky-video" title="Meet Alex Ward, Government Contracts Practice Co-Chair" src="https://www.youtube-nocookie.com/embed/TkliwdSlTaQ?rel=0" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen="1" title="iframe"></iframe></div>J. Alex Ward is co-chair of Morrison Foerster’s Government Contracts and Public Procurement group. His practice covers a full range of government contracts matters, including investigations, bid protests, claims, general litigation, corporate transactions, and counseling. Alex strives in all matters is to provide his clients the highest level of efficient and effective representation.Alex represents contractors in internal and external investigations, disclosures to the government, and qui tam litigation, with great success in reducing or eliminating his clients’ exposure through active engagement with the government. His work in this area includes obtaining numerous declinations and dismissals of False Claims Act cases in their earliest stages, sparing his clients the cost, risk, and exposure of litigation.He has also served as lead counsel in dozens of bid protests involving military and civilian agency procurements of a wide range of products and services, including all manner of pre- and post-award protests in the GAO, the U.S. Court of Federal Claims, and state tribunals, as well as appeals to the U.S. Court of Appeals for the Federal Circuit and size protest appeals before the SBA’s Office of Hearings and Appeals.Alex handles all aspects of the claims process, from the initial assessment and drafting of requests for equitable adjustment through litigation in the Boards of Contract Appeals and the Court of Federal Claims. Alex’s practice also covers the full gamut of other controversies confronting government contractors, including prime-sub, teaming partner, employer-employee, competitor, and indemnification disputes. His litigation work also includes a wide variety of pro bono engagements, in which he has represented both individual and institutional clients in matters ranging from immigration and criminal defense to sustainable procurement and protection of the environment.Prior to joining the firm, Alex served in the U.S. Army as a commissioned officer and an Assistant to the General Counsel of the Army responsible for civil works and international matters, and as a clerk for judges on the U.S. Courts of Appeals for the Armed Forces and the D.C. Circuit. He is a member of the Boards of the Morrison & Foerster Foundation and the Chesapeake Bay Foundation and of Law360’s Government Contracts Editorial Board.

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Alex is co-chair of Morrison Foerster’s Government Contracts and Public Procurement practice. His practice covers a full range of government contracts matters, including bid protests, claims, investigations, corporate transactions, and counseling.

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Morrison Foerster’s Government Contracts Insights blog provides an in-depth analysis of news, developments, and trends impacting government contracting and procurement. Through Insights, attorneys from our nationally recognized Government Contracts and Public Procurement practice will offer a real-time assessment of the statutory, regulatory, legal, and business-related developments that are shaping the industry. This blog will also examine a full array of U.S. and non-U.S. public procurement issues, mindful that our clients compete in a global marketplace.Read about our <a href="http://govcon.mofo.com/editors/">Authors</a>.Never miss a post. Subscribe to get real-time updates.

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In fiscal year 2019, federal agencies awarded $132.9 billion in contracts to small businesses. This is a reflection of policy goals, as Congress and federal agencies have long worked to provide business opportunities to small business concerns through federal contracts and subcontracts. The Federal Government does this through specialized small business contracting programs, some of which are further targeted to assist specific subgroups—women, veterans, the economically disadvantaged—that the Government wants to support through its procurement practices.The process of qualifying for these small business contract programs and of obtaining contracts reserved for small businesses can be somewhat complex. A maze of rules, including the Federal Acquisition Regulation (FAR), FAR contract clauses, and Small Business Administration (SBA) regulations and decisions, as well as SBA standard operating procedures and informal guidance are involved.Morrison & Foerster co-chair and partner Tina Reynolds, along with associate Victoria Dalcourt Angle and law clerk Roke Iko, has written a Briefing Paper, published by Thomson Reuters, that is designed to help the reader understand the small business contracting process and to become familiar with specific small business programs. In addition, the article will provide a brief overview of some of the regulatory issues small businesses must navigate and highlight the benefits (and potential downsides) of small business contracting.

Tina is a partner in Morrison & Foerster’s Government Contracts practice. She represents a wide variety of government contractors including information technology, defense, biotechnology, and pharmace

Tina Reynolds

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Tori Dalcourt Angle is an associate in the Government Contracts practice in Morrison Foerster’s Washington, D.C. office.
Tori advises clients on various government contract matters, including both pre

Victoria Dalcourt Angle

Victoria Angle

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Roke Iko is an associate in the Litigation Department in Morrison & Foerster’s Washington, D.C. office.
Roke assists clients in the full range of government contracts litigation and compliance matters

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Small Business Participation In Government Contracts: Why It’s Important, How To Qualify, Benefits To Enjoy, And Traps To Avoid

SBA Issues Final Rule on Appeals Process for PPP Loan Review Decisions

In fiscal year 2019, federal agencies awarded $132.9 billion in contracts to small businesses. This is a reflection of policy goals, as Congress and federal age

Small Business Participation In Government Contracts: Why It’s Important, How To Qualify, Benefits To Enjoy, And Traps To Avoid

As we recently discussed, the U.S. Small Business Administration (SBA) has published a long-awaited rule that made important changes to numerous small business contracting programs and the rules Federal agencies must follow when contracting with small businesses.  These changes will go into effect on November 16, 2020.  You can read <a href="https://govcon.mofo.com/small-business/sba-issues-wide-ranging-final-rule-addressing-government-contracting-programs/">our summary of the rule here</a> and read <a href="https://www.govinfo.gov/content/pkg/FR-2020-10-16/pdf/2020-19428.pdf">the rule itself here</a>.  In this post, we’ll take a closer look at changes in the way procuring agencies will have to consider the past performance, experience, security clearances, capabilities, and certifications of small businesses and small business joint ventures.The Existing RegimeTo understand why the new rule is important, it’s useful to consider the current state of affairs.  When businesses compete for Government contracts, they often create joint ventures or put together subcontractor teams with different companies complementing each other’s capabilities and experience.  In general, procuring agencies have had wide latitude in being able to specify on a procurement-by-procurement basis the extent to which the prime offeror itself must have certain capabilities and experience, and the extent to which the offeror may rely upon subcontractors or joint venture members to fill in any gaps.There currently is one principal exception to that wide latitude.  When an offeror is a small business joint venture, the procuring agency is required to consider the past performance and experience of the joint venture members (including of any large business mentor joint venture member) as the past performance and experience of the joint venture itself.  15 U.S.C. § 644(q)(1)(C); 13 C.F.R. § 125.8(e) (Dec. 27, 2016).That exception largely solves a problem commonly experienced by small business joint ventures that may lack any experience or past performance in their own names, despite being composed of companies that may have extensive experience and past performance.  The U.S. Government Accountability Office (GAO) has held that this exception does not require agencies to give full evaluation credit to a joint venture where only one of the members possesses relevant experience or past performance, but that is a slightly different problem.  See Ekagra Partners, LLC, B-408685.18, Feb. 15, 2019, 2019 CPD ¶ 83 at 6-7.  By its own terms, this automatic exception does not extend to capabilities, certifications, security clearances, and other qualities (apart from experience and past performance) an agency may seek from the offeror itself.  Nor does it apply to teaming arrangements (such as prime-subcontractor relationships) that are not small business joint ventures.As a result of the fairly narrow applicability of this fairly narrow exception, small business offerors currently have to scrutinize each solicitation to determine whether it requires offerors to possess clearances, capabilities, certifications, and so forth in their own names, or whether they may rely upon other entities to meet those requirements.  If the solicitation is unfavorable to them in that respect, they then have to advocate for a discretionary solicitation amendment or rethink their teaming structure – or possibly not submit a proposal at all.  This is a particularly weighty consideration in math-based evaluations, where each reference or qualification must be scrutinized.Further, the current regime made it challenging for joint ventures to access work that requires clearances.  Regulators were often confused by requests for clearances to be issued to unpopulated joint ventures, and requirements around the employment of facility security officers proved frustrating.The ChangesThe new rule changes the existing regime in ways that most small businesses will roundly welcome.First, with respect to the perennial question of facility security clearances, the new regulation provides:(4) Facility security clearances. A joint venture may be awarded a contract requiring a facility security clearance where either the joint venture itself or the individual partner(s) to the joint venture that will perform the necessary security work has (have) a facility security clearance.(i) Where a facility security clearance is required to perform primary and vital requirements of a contract, the lead small business partner to the joint venture must possess the required facility security clearance.(ii) Where the security portion of the contract requiring a facility security clearance is ancillary to the principal purpose of the procurement, the partner to the joint venture that will perform that work must possess the required facility security clearance.13 C.F.R. § 121.103(h)(4) (emphasis added).  Thus, if the security clearance is needed for “primary and vital requirements” of the contract, the lead partner must hold the clearance; otherwise, whichever partner will perform the work to which the clearance relates must hold it.  Gone are the days of trying to get a facility security clearance approved at the last minute for a joint venture that has no employees and no prior contracting history.Second, with respect to capabilities more broadly, the new rule significantly expands the areas for which an agency must credit the capabilities of the partners of small business joint ventures:(e) Capabilities, past performance and experience. When evaluating the capabilities, past performance, experience, business systems and certifications of an entity submitting an offer for a contract set aside or reserved for small business as a joint venture established pursuant to this section, a procuring activity must consider work done and qualifications held individually by each partner to the joint venture as well as any work done by the joint venture itself previously.  A procuring activity may not require the protégé firm to individually meet the same evaluation or responsibility criteria as that required of other offerors generally. The partners to the joint venture in the aggregate must demonstrate the past performance, experience, business systems and certifications necessary to perform the contract.13 C.F.R. § 125.8(e) (emphasis added).  The references to capabilities, business systems, certifications, and qualifications are a significant expansion beyond the prior regulatory requirement that agencies consider joint venture partners’ “past performance and experience.”   This section also differs somewhat from the new section on facility security clearances.  Whereas the new 13 C.F.R. § 121.103(h)(4) specifies which joint venture partner must hold a facility security clearance, the new 13 C.F.R. § 125.8(e) places no such restrictions on other capabilities, business systems, certifications, and qualifications.The regulation as written does not require procuring agencies to consider which joint venture member possesses a required qualification other than facility security clearances.  One can, however, imagine solicitations that reasonably might require certain qualifications to be tied to the joint venture member that actually will be performing the related work, similar to the way the new facility security clearance rule works.Third, in addition to the new treatment of the qualifications of joint venture members, the rule creates a similar, though less expansive and more ambiguous, requirement to consider “the capabilities, past performance, and experience” of small businesses’ named first-tier subcontractors in certain circumstances:(g) Capabilities, past performance, and experience.  When an offer of a small business prime contractor includes a proposed team of small business subcontractors and specifically identifies the first-tier subcontractor(s) in the proposal, the head of the agency must consider the capabilities, past performance, and experience of each first tier subcontractor that is part of the team as the capabilities, past performance, and experience of the small business prime contractor if the capabilities, past performance, and experience of the small business prime does not independently demonstrate capabilities and past performance necessary for award.13 C.F.R. § 125.2(g) (emphasis added).On first blush, the new rule appears to require agencies to consider the capabilities, past performance, and experience of named first-tier subcontractors of small business offerors.  Many agencies already regularly consider the past performance or experience (and sometimes the capabilities) of first-tier subcontractors responsible for a material percentage of contract performance, regardless of the size status of the prime offeror.  This rule, however, contains a few important differences that may not be obvious at first glance:(1) It does not specify that the named subcontractor must be responsible for a certain percentage of the work, or even that the capabilities or experience it brings to the table relate to the work it will be performing on the contract. Time will tell whether this regulation will be interpreted to allow agencies to tie any credit for a subcontractor to the kind and amount of work the subcontractor itself will perform.(2) Although most of the regulation refers simply to “first-tier subcontractor,” one condition for applying the new regulation is that the small business proposal must identify a “team of small business subcontractors.” As written, the rule is ambiguous as to whether it applies to all of a small business’s named first-tier subcontractors, or to all of them if they are part of a team that includes some small business subcontractors, or only to those first-tier subcontractors that are themselves small businesses.(3) The new rule does not require an agency to consider named first-tier subcontractors’ capabilities, past performance, and experience if the small business prime offeror has the capabilities, past performance, and experience “necessary for award.” The new rule would prevent an agency from disqualifying a small business without capabilities necessary for award, if one of its first-tier subcontractors has the necessary capabilities.  As written, however, it does not necessarily require agencies to consider the subcontractors’ contribution as part of the overall qualitative evaluation of a proposal’s merit.  This distinction is important because a small business offeror with an acceptable level of capabilities on its own is not necessarily entitled, under this rule, to credit for outstanding capabilities that its subcontractor may possess.TakeawaysThe SBA’s new rule provides much-needed clarity, uniformity, and fairness – particularly for small business joint ventures.  The new rule for small businesses’ first-tier subcontractors is also a step in the right direction, although the rule’s ambiguities will require some time (and likely some litigation) for agencies and companies to understand how it will work in the real world.Offerors should note that these regulations do not begin to apply until November 16, 2020, although agencies are free to amend pending solicitations to include them, and are free to issue new solicitations incorporating them even before November 16.  After November 16, 2020, offerors should continue to pay attention to new solicitations to ensure they do not contain terms that diverge from the amended regulations.  Under standard bid protest rules, if a solicitation issued after November 16 fails to comply with the new regulations, an aggrieved potential offeror must challenge the terms prior to the solicitation’s proposal submission deadline or forever hold its peace.

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Damien is a partner in the firm’s Government Contracts & Public Procurement practice. He represents clients in all facets of government contracts transactions, as well as regulatory counseling, subcon

Damien Specht

Damien C. Specht

Jim Tucker is of counsel in Morrison & Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office.
Jim’s practice runs the gamut of litiga

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New Small Business Rules: Capabilities of Small Business Joint Venture Members and First-Tier Subcontractors

CIO-SP4 Draft RFP Implications for JV/Partnerships

As we recently discussed, the U.S. Small Business Administration (SBA) has published a long-awaited rule that made important changes to numerous small business 

New Small Business Rules:  Capabilities of Small Business Joint Venture Members and First-Tier Subcontractors

The Small Business Administration (SBA) today issued a <a rel="noopener noreferrer" target="_blank" href="https://www.govinfo.gov/content/pkg/FR-2020-10-16/pdf/2020-19428.pdf">significant final rule</a> addressing numerous issues of interest to Federal contractors.  With one exception, the rule will take effect on November 16, 2020.  We anticipate addressing the more important changes in greater detail in the coming days, but the following is a non-exhaustive list of what we consider the highlights of the 54-page rule:<ul><li style="padding-bottom: 16px;">Security Clearances for Joint Venture Offerors. For contracts requiring a facility security clearance, procuring agencies will no longer be allowed to require as a condition of award that a small business joint venture possess a clearance in its own name.  Ordinarily, as long as the lead joint venture member has the required clearance and commits to keeping the contract records at its cleared facility, the joint venture itself will be deemed to satisfy the clearance requirement.  For contracts where the security portion is merely ancillary to the contract’s principal purpose, the non-lead partner (including a large-business mentor) might supply the clearance instead.</li><li style="padding-bottom: 16px;">Capabilities and Past Performance of First-Tier Subcontractors. Procuring agencies will now be required to consider the certifications, qualifications, capabilities, and past performance of first-tier subcontractors that a small business offeror specifically identifies in its proposal if the small business’s own capabilities and past performance are not independently strong enough to justify award.</li><li style="padding-bottom: 16px;">Order-Level Recertifications Under Multiple-Award Contracts. Agencies sometimes award a multiple-award contract as a full set aside or with one or more reserves or pools set aside for small businesses or socioeconomic statuses.  Under the new rule, size and status will flow from the underlying contract to individual orders issued under that contract, and the firm can continue to rely on its original representations for the contract itself unless a contracting officer requests recertification of size or status for a specific order.  However, the big change relates to unrestricted contracts or awards based on a different socioeconomic status or category than the multiple award contract itself.  Where the underlying contract is unrestricted, however, or where the agency sets an order aside for a socioeconomic group for which the underlying contract or pool was not itself set aside, offerors must certify to their status as of the date they submit their offers on the order itself; size protests are specifically authorized in connection with these newly set-aside orders.  This does not apply to Federal Supply Schedule contracts or Blanket Purchase Agreements under those contracts.</li><li style="padding-bottom: 16px;">Merger or Acquisition While Proposals Are Pending. If a small business loses its size status due to a merger or acquisition (including agreements in principle) after it submits its proposal but prior to award, it must recertify its size status to the contracting officer.  Under the new rule, if the transaction occurs within 180 days of the date of initial offer for the contract, the offeror becomes ineligible for award.  If it occurs after 180 days, the firm remains eligible for award, but the agency may not count an award to that firm as a small business contract.  This recertification requirement does not apply when the ownership of a concern that is at least 51 percent owned by tribe, Alaska Native Corporation, or Community Development Corporation (CDC), changes to or from a wholly owned business concern of the same entity, as long as the ultimate owner remains the same.</li><li style="padding-bottom: 16px;">8(a) Program. In addition to numerous revisions to the 8(a) program in general, the new rule provides new guidance for 8(a) status for companies owned by different members of the same family, as well as a number of provisions applicable to 8(a) companies owned by Alaska Native Corporations, Native Hawaiian Organizations, Indian tribes, and Community Development Corporations.  The rule also provides new guidance for contracts that are placed with the SBA’s 8(a) program, both as competitive and sole-source awards, as well as their follow-on requirements.  The 8(a) mentor-protégé program will be merged into the more recently established All Small mentor-protégé program, with a single set of rules applicable to the single program.</li><li style="padding-bottom: 16px;">8(a) Mentor-Protégé JV Agreement Approvals. The rule eliminates the requirement that 8(a) participants receive SBA approval for every joint venture agreement and amendment where the 8(a) company’s mentor-protégé joint venture competes for an 8(a) contract.</li><li style="padding-bottom: 16px;">Final Proposal Revisions and Size Status. The rule clarifies that size status for purposes of complying with the nonmanufacturer rule, the ostensible subcontractor rule, and joint venture agreement requirements is determined as of the date of submission of final proposal revisions (or final bid for sealed bidding).  This is an exception to the normal rule that size is determined as of the date of submission of the initial proposal including price.  SBA characterizes this as a clarification of the existing policy preventing an offeror whose initial proposal was compliant from making subsequent, pre-award changes that would render it noncompliant with these particular rules.  As a practical matter, though, the rule as written also will allow an offeror with a noncompliant joint venture agreement to amend the agreement and fix its problems prior to final proposal revisions.</li><li style="padding-bottom: 16px;">Order-Level NAICS Codes. The rule specifies that agencies must assign a NAICS code to each order issued under a multiple-award contract that accurately corresponds to the work to be performed under that order, and the order’s NAICS code must be the same as the one(s) assigned to the underlying multiple-award contract.  The rule prohibits contracting officers from issuing an order under a multiple-award contract if the underlying contract lacks a NAICS code that corresponds to the order’s principal purpose.</li><li style="padding-bottom: 16px;">Economic Dependence/Identity of Interest. The SBA has clarified the rule on affiliation through economic dependence.  The rule retains the general presumption of affiliation where a company derives more than 70 percent of its revenue from an alleged affiliate over the previous three fiscal years, but specifically allows a company to rebut the presumption by showing “that despite the contractual relations with another concern, the concern at issue is not solely dependent on that other concern.”  (Emphasis added.)</li><li style="padding-bottom: 16px;">Three-in-Two Rule Changed. The new rule eliminates the previous three-contract limit for joint ventures composed of two or more small businesses or of mentor-protégé teams.  The duration of such joint ventures continues to be limited: A joint venture cannot continue to submit proposals for new contracts for longer than two years from the date of its first award, but it can be awarded contracts on proposals submitted before that date.  After two years, the joint venture is deemed to be a separate business concern with its joint venture members becoming affiliates for size purposes, even if they are both small businesses or a mentor-protégé team.  Parties may still form multiple joint ventures with the same members, but, at some point, this may result in affiliation.</li><li style="padding-bottom: 16px;">JV Protégé Workshare. The rule clarifies that, in a mentor-protégé joint venture, the protégé firm must itself perform at least 40 percent of the work to be performed by the joint venture and that this workshare is calculated consistent with 13 CFR 125.6(b).  Although the joint venture may rely on similarly-situated subcontractors to comply with the limitations on subcontracting rule, the protégé firm may not rely upon such subcontractors to meet its independent requirement to perform at least 40 percent of the joint venture’s own share of the work.</li></ul>

SBA Issues Wide-Ranging Final Rule Addressing Government Contracting Programs

The Small Business Administration (SBA) today issued a significant final rule addressing numerous issues of interest to Federal contractors.  With one exception

SBA Issues Wide-Ranging Final Rule Addressing Government Contracting Programs

The Paycheck Protection Program (PPP), which is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, provides aid to qualifying small businesses in the form of loans with terms favorable to borrowers, including, in particular, provisions that allow potentially the entire loan amount to be forgiven if the proceeds are spent on payroll and other qualifying expenses.  This infographic provides an overview of the issues borrowers must analyze, and documents to gather, when preparing their loan forgiveness applications.<a href="https://media2.mofo.com/v3/images/blt5775cc69c999c255/blt8df99a05bfba0894/627318d3a1a1dd2aa9f6cad2/08_28_govcon_pppforgiveness300dpi_v2-scaled.jpg?format=auto&quality=60" target="_blank"><img border="none" alt=" PPP Loan Forgiveness Checklist" src="https://media2.mofo.com/v3/images/blt5775cc69c999c255/blt8df99a05bfba0894/627318d3a1a1dd2aa9f6cad2/08_28_govcon_pppforgiveness300dpi_v2-scaled.jpg?format=auto&quality=60" title="Click to enlarge" class="img-responsive" type="asset" sys-style-type="download"></a>