Small Business? Better be able to prove it

The Small Business Administration has contracting assistance programs, in place, to help small businesses by limiting competition for certain government contracts. Additionally, they work to ensure at least 23 percent of all federal contracting dollars goes to small businesses. (JD Supra August 13, 2021)

The current SBA programs are:

  • The small business set-aside program
  • 8(a) Business Development (8(a)) Program)
  • Service-Disabled Business (WOSB) Program
  • Historically-Underutilized Business Zone (HUBZone) Program (ibid)

It has come to light that some of these programs have had issues certifying and monitoring participants of the programs. Recently, two inspectors general audited the HUBZone and SDVOSB programs. The audits showed 15 of 39 firms receiving HUBZone certification and a HUBZone contract. Of the 15, three were improperly certified to participate in the program. The SBA had not made an eligibility determination for four others participating in the program. (ibid)

The Department of Defense (DoD) Office of Inspector General (DoD-OIG) recently issued a report that turned up concerns with how DoD confirms eligibility for SDVOSB contract awards. In the report, 29 SDVOSB contractors were audited. 16 contractors at issue received 27 contracts, together with values at $827.8 million. Those 16 contractors “did not have a service-disabled veteran as the owner and the highest-ranking officer of the company or whose publically available information and contract documentation did not support that the contractor met the requirements for SDVOSB status.” (ibid)

Since the issues have come out, both criminal and civil enforcement has increased. There have been four federal indictments or guilty pleas from business owners who misrepresented their status as a small business, women-owned business, service-disabled veteran-owned business, or minority-owned business. These are all clear-cut cases of misrepresentation and fraud. Recently, a construction company obtained $250 million in government contracts set aside for SDVOSBs. The owner of the company put a disabled veteran as the apparent owner of the construction company to qualify the company as an SDVOSB. The true owner turned out to be a non-service-disabled business partner who controlled both the financial and operational control of the company. This type of fraud is known as a “rent a vet” scheme. (ibid)

The government may use the False Claims Act (FCA) (31 U.S.C 3729-3733) to root out contractors who violate small business compliance laws. The FCA has a whistleblower aspect allowing for whistleblowers to obtain a percentage of the government’s recovery from a successful resolution of the matter. The FCA is a civil enforcement statute that does not require specific intent to defraud. The reach of the FCA is broad and not to be taken lightly. (ibid)

In 2020, there were 8 key settlements, rulings, and filings regarding various small business fraud scheme allegations and five settlements in 2021 already. Just last month a Virginia-based consulting group and the president of the company agreed to pay a $4.8 settlement regarding FCA allegations. The recent civil enforcement should be a flashing light of warning to small business government contractors that inspectors general and the DOJ are actively pursuing contractors who know their actions are in violation of small business contracting rules. (ibid)

To stay compliant and reduce risk, the following guidelines should be followed:

  • Establish a company culture of compliance, with every employee understanding the rules
  • Work with subject matter experts to stay informed
  • Continuously verify the company eligibility in the program
  • Assess the eligibility of subcontractors or affiliates
  • Perform comprehensive and thorough compliance risk assessments (ibid)

Following the guidelines will allow small businesses to spend their resources on participating in government contracts and not on criminal/civil violations.

Trying to determine if you meet the guidelines? Give us a call.

 

 

 

Polaris Replacing Alliant 2

This past July, GSA put to rest the Aliant 2 Small Business contract. The just last week, GSA released a draft RFP named Polaris, a Governmentwide Acquisition Contract (GWAC) to provide customized Information Technology (IT) services-based solutions.  The draft RFP breaks out small business contractors into specific “pools,” for Small Business, HUBZone Small Businesses, and Women Owned Small Businesses. GSA reserves the right to add additional pools when deemed necessary. (beta.SAM.gov, December 31, 2020)

According to the draft RFP, Polaris will provide agencies with customized IT services and IT services-based solutions, which can be tailored to meet particular mission needs and may include any combination of IT services and new and emerging technologies. (ibid)

GSA encourages contractors to provide innovative solutions to task order requirements prioritizing emerging technologies.  Examples of emerging technologies included within the draft RFP are:

  • Advanced and Quantum Computing — cryptography/encryption, secure communications, design of high-performance computers, computer clusters, and networks, Quantum Machine Learning
  • Artificial intelligence (AI) — Computer Vision, Deep Learning, Machine Learning, Natural Language Processing (NLP),  Spatial Computing, Speech Recognition
  • Automation technology — Robotic Process Automation (RPA), Automated Messaging Services, Data Cleaning Scripts, Interactive Voice Response (IVR), Smart Notification
  • Distributed ledger technology — Blockchain Implementation Solutions, DLT Network Design Services, Smart Contract Programming Services
  • Edge computing — 5G Implementation Services, Edge Analytics, Edge Application Services, Edge Computing Architecture Design Services, Internet of Things (IoT) Services
  • Immersive technology  — Virtual Reality, Augmented Reality

Examples of Performance areas within the draft RFP are as follows:

  • Cloud Services
  • Cybersecurity
  • Data Management
  • Information and Communications Technologies
  • IT Operations and Maintenance
  • Software Development
  • System Design

Contractors may “provide ancillary support as necessary to offer an IT services-based solution,” but, as with the GSA Schedule, only “when it is integral to and necessary for the IT services-based effort.” (ibid)

Contractors should take note of the security considerations as purchasers may be from the Department of Defense as well as civilian agencies. In particular, the Defense Department’s Cybersecurity Maturity Model Certification is a developing regulation and requirement included in the draft RFP. Additional Cybersecurity and Supply Chain Risk Management (SCRM) requirements are expected to also be included. (ibid)

All draft RFP feedback is due by 4:00 PM Central Time, January 29, 2021.

Have questions concerning the draft RFP, who can respond, and how? Give us a call.

Alliant 2 is Out/Polaris is In

After a year of protests and federal court hearings, the Government Accountability Office has canceled its $15 billion Alliant 2 Small Business contract. GAO is calling the replacement contract “Polaris.” A GSA spokesperson said, “Polaris will not only guide small businesses through the federal market, it will also help GSA customer agencies through the acquisition of IT service-based solutions, and give GSA a chance to improve our offerings and set the agency on a solid course for the future.” (GSAblogs.gsa.gov, October 1, 2020)

Administration sees the industrial base broadening by:

  • Pricing Strategy: GSA plans to increase its pool of qualified small businesses that serve federal agencies. GSA will employ Section 876 of the Fiscal Year 2019 National Defense Authorization Act, allowing contract awards to qualifying contractors without consideration of prices for hourly services. Focus on price competition ultimately takes place at the task order level.
  • On-ramps: Allows for an expanded industrial base as technology changes and for vendors to be considered on the GWAC following an initial award period.
  • Opportunity Expansion: An increased opportunity for HUBZone and woman-owned businesses.
  • Embracing Technology to Maximize Efficiency: Polaris will provide agencies with access to emerging technology providers, especially those offering artificial intelligence, automated technologies, blockchain, 5G implementation, cybersecurity, and cloud. (ibid)

The vendor evaluation strategy will be similar to that used in the Veterans Technology Services 2 and Alliant 2 contracts. Both were guided by industry comments. FAS may utilize an online proposal submission tool to speed up Polaris contract awards, as well as a modified evaluation strategy. (Federal Computer Week, October 5, 2020)

Questions about the Polaris evaluation strategy and how your company might do business on the platform? Give us a call.

Can Alliant 2 Be “Newer, Better” ?

GSA has finally put us all out of our Alliant 2 Small Business misery. Last week they canceled the acquisition contract. The original award was wrought with confusion, protests, and court disputes, so cancellation isn’t that surprising. (Nextgov, July 2, 2020)

However, GSA promises that the small business IT instrument will live on in a newer, better solicitation. Keep your eyes peeled for the larger and newly structured solicitation. No word yet on the release date of the new solicitation. (ibid)

Laura Stanton, acting GSA Assistant Commissioner for the Office of Information Technology when announcing the cancelation said, “The needs of our customer agencies, small business partners, and industry partners are rapidly evolving, GSA is committed to finding ways for our GWACs to reflect the current IT marketplace so that we can maximize the opportunities for small and women-owned, HUBzone, service-disables veteran-owned, and 8(a) small businesses to contract with the government for cybersecurity, emerging technology, and IT supply chain risk management needs.”

Stanton also said, “we are working to expand the number of master contract awards to highly qualified small businesses on our GWACs, while focusing on technology requirements that support our customer agencies for future mission success.” (ibid)

Questions about the cancellation and or the upcoming solicitation? Give us a call.

Self Certification — No More ;-(

The 2015 National Defense Authorization Act mandated that the Small Business Administration (SBA) discontinue self-certification of women-owned and other small businesses. In 2020, SBA plans to finalize a self-certification rule that closes a loophole allowing participants in the SBA’s Women-Owned Small Business (WOSB) program to self-certify. (Federal News Network, June 2019)

Approximately one-quarter of all federal contracts are held by small businesses, which over the past six years has helped federal agencies to  exceed  SBA’s governmentwide small business contracting goal. This year’s spending of more than $120 billion on small business contracts surpasses last year’s spending by nearly $15 billion.

The Government Accountability Office reported in March that almost 40 percent of WOSB-certified businesses were ineligible. Meanwhile, SBA’s Office of Inspector General June 2018 audit found 89 percent of sole-source (50 out of 56 contracts) did not meet all program criteria. Basically, there is currently no way to know if the contracts, listed in the chart below, were actually eligible for the sole-source awards. (ibid)

Rob Wong, SBA’s associate administrator of the Office of Government promotes a formal certification to  give the program some much-needed integrity. Wong said, “simply put, the wrong companies were receiving our contracts, we want to make sure that, if a company receives a contract through these programs, they’re actually eligible to receive it.” (ibid)

SBA has subsequently published a proposed rule in the Federal Register eliminating self-certification and providing a free online certification application to WOSB. Comments on the proposed rule are being accepted until July 15. In Wong’s opinion, it is high time to streamline the vetting process for the many other set-aside programs, all of which have different sets of eligibility criteria. Wong feels that going to three formal certifications for 8(a), Historically Underutilized Business Zones, women-owned, and service-disabled veterans will unify the processes. The rule with set-aside screening is expected to take a year for the changes to take effect. (ibid)

Do you have questions about the new certification process and how it may affect your current contract or an upcoming opportunity? Give us a call at 301-913-5000.