Under the Small Business Administration’s regulations, two firms may partner as a joint venture to perform a small business set-aside contract, provided that each partner is a small business under the size standard assigned to the contract.  But, a recent SBA decision highlights the fact that simply entering into a joint venture does not excuse each member of the joint venture from SBA scrutiny over affiliation.

In this recent case, a U.S. Department of Defense, Missile Defense Agency contract for business operations support was awarded to a joint venture composed of two (allegedly) small businesses.  Following a size protest, the SBA took a closer look at each member of the JV and didn’t like what it found.

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While one of the JV partners was in fact small, the other had a problem.  Specifically, citing to the economic dependence rule, the SBA found that the second firm derived more than 70% (and, in fact, close to 100%) of its business from one source (a large business) over a three year period.  Based on this dependence, the SBA determined that the firms are affiliated.

This is bad news not only for the (now no longer small) firm, but also the JV itself.  Because each member of the JV is not small, the SBA determined that the JV is not small for purposes of this procurement.  In other words, the JV lost the contract.

This case highlights two important points.  First, it is essential for small businesses to understand the SBA’s rules on affiliation and be confident in their size.  Size protests unfold quickly, so information about your business’s size should be at your fingertips — and nothing should come as a surprise.  Second, the case reinforces the importance of smart teaming on government contracts.  If you pick the wrong dance partner, you could find your time and effort in pursuing (and even winning) a contract award is ultimately wasted.

If you are interested, you can learn a lot more about smart and strategic teaming in this presentation.

For small business government contractors, the question of affiliation should always be at the top of the list of priorities.  A finding of affiliation between your business and another business (and, in particular, a large business) could be enough to lose your small business size status – and the ability to compete for those coveted set-aside contracts.

One of the few recognized exceptions to affiliation is an approved mentor-protégé relationship under the Small Business Administration’s (SBA) 8(a) business development program.  In short, an 8(a) protégé can joint venture with its SBA-approved large business mentor and still qualify as a small business for any federal government contract or subcontract – without the fear of affiliation.

While it may seem a bit obvious or a simple matter of housekeeping, the SBA’s Office of Hearing and Appeals recently issued a stern warning that the exception to affiliation depends of having an approved mentor-protégé agreement in place.  Specifically, OHA concluded that failure to obtain the proper documentation resulted in a finding of affiliation and precluded eligibility for a small business set-aside contract — even when the two firms involved had a long history of participation in the mentor-protégé program.

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This decision serves as an important reminder for firms currently partnering as part of the 8(a) program to stay current – but it should also be a wake-up call for all of the businesses out there planning to take advantage of the SBA’s imminent (groundbreaking) expansion of the mentor-protégé program.

Now that the SBA is accepting expanded mentor-protégé program applications, it is a great time to take stock of how to make the program work for your business.  As we recently highlighted, partnering between government contractors can open the door to new and exciting opportunities – but it works best for those firms that conduct proper due diligence.

Is your mentor-protégé agreement working for you?  Now is the time to find out and (if necessary) make the appropriate course corrections.

Every government contractor that files a bid protest has the same goal in mind – corrective action.  The agency made a procurement error and changes need to be made.

But just because the agency takes corrective action does not mean it will be the corrective action your firm wants.  Contractors should take the time to consider the possible outcomes of a successful bid protest before filing.

Take, for example, the recent U.S. Court of Federal Appeals decision denying a protest over corrective action.  In that case, an unsuccessful offeror successfully protested a United States Transportation Command non-temporary storage contract.  In response to the protest, the agency took corrective action and started the process of re-evaluating all offerors in order to make a new award decision.

But this was not the corrective action the protestor expected.  Because the protest argued that the original awardee’s proposal was technically deficient, the protestor wanted the government to cancel the first award and make a new award decision (in its favor) without further evaluation.

The Court rejected the idea that a protester can limit the agency’s authority to correct evaluation errors.  To the contrary, the decision holds that it is within the agency’s discretion to review its prior conclusions and conduct a re-evaluation (provided that the new evaluation conforms to the solicitation and is fair to all offerors).

So is the takeaway that your firm shouldn’t file a protest unless it knows it will receive the award?  Not at all.  As this decision makes clear, you cannot control or limit the agency’s authority when it comes to corrective action.  The correct takeaway is that you should make sure that your firm is prepared for all contingencies before moving forward with filing a bid protest – including the possibility of a complete re-evaluation.

Again, on this point, the COFC decision is extremely illuminating.  Even though the protestor was successful in obtaining corrective action, it also found out that its own proposal was not considered technically acceptable by the agency (due to an alleged failure to meet the solicitation criteria).  If not for that proposal drafting error, it is possible the protest would have a different outcome (including a new award decision rather than a re-evaluation).

Taking the time to work through these scenarios in advance is the key to time and cost effective bid protests.  Even bid protests that result in corrective action are disappointing when they do not result in a new contract for your business.


The Government Accountability Office (GAO) is establishing a new system for filing bid protests – the Electronic Protest Docketing System (EPDS).  GAO promises that the new system will be both “secure” and “easy-to-use.”

This week, GAO rolled out a new set of instructions that offers greater insight into the new e-filing process.


The instructions include definitions of key terms, details on eligibility for bid protest filers, and some logistical information on how protests will be filed and processed under the new EDPS system.

GAO still has not provided a firm date from when EPDS will go live.  When a start date is set, will the change to EPDS be earth-shattering? No.  GAO bid protests will still be subject to the same rules concerning content, standing, and timeliness (among other things).

One new EPDS feature sure to garner more attention as the roll out continues is the new $350.00 filing fee.  Currently, filing bid protests is free.  GAO says that the new fee is included in order to offset the cost of the EPDS system.

The filing fee is new, but should not affect a contractor’s strategy for pursuing a protest at the GAO.  As we’ve covered in detail before, the GAO is the ideal forum for protesting straight-forward agency errors that can – at least in theory – be resolved quickly in the GAO’s streamlined environment.  Protests involving more complicated legal questions are better suited for resolution at the Court of Federal Claims.

For more on the pros and cons of protests at the GAO, check out my Government Contracts 101 guide.


Our Blog often covers issues associated with government contracts protests (like, for example, protests at the GAO, Court of Federal Claims, and size protests at the SBA).  The point of those posts is to highlight ways that disappointed offerors can “get back in the game” by challenging an improper award made to another business.

But, occasionally, we’re reminded that the best practice (whenever possible) is to avoid the need for a protest altogether.  By focusing on the details and learning how to serve up timely proposals that check all of the government’s boxes, you’ll put yourself in a position to win more contract awards and avoid the need to file protests on the back end.

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Take the recent opinion from the GAO denying a protest over the post-deadline submission of pricing data.  In that case, the protester was eliminated from the procurement when it used a draft agency document to submit its pricing information, rather than the final revised version of the form later circulated by the agency.

The protester offered a number of equitable arguments against its elimination.  It used a form that was provided by the government, just not the most recent version.  And, in any event, it included all of the key pricing information.  At a minimum, shouldn’t the agency allow an interested offeror to correct this deficiency by simply substituting the correct form?

The GAO rejected all of these arguments out of hand.  It held that the agency acted reasonably in deciding to reject the offer — it would be unfair (GAO surmised) for the agency either to accept an offer based on different pricing assumptions (the draft form) or allow one offeror the special privilege of revising its offer after the deadline for proposals (on the corrected form).  As the GAO pointed out, the agency specifically cautioned all offerors that only the revised pricing form would be accepted.

Putting together a proposal in response to an agency solicitation can be a time-consuming and expensive proposition.  Protect that investment by developing a system for checking (and double-checking) your work.  Sometimes, a new or fresh set of eyes will be able to pick up on mistakes or omissions, or perhaps better see the requirements from the agency’s perspective.

Taking the time to get it right can help minimize the frustrating experience of missing out on a contracting opportunity due to easily avoidable mistakes.

Just last week, we looked at the importance for small business contractors to check their SAM.gov profiles to make sure they are properly certified as small.  Incorrect information can lead to a variety of problems, not the least of which is potentially losing out on a small business set-aside contracting opportunity.

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This point was refined by a newly published opinion from the Government Accountability Office.  As part of the GAO protest, a disappointed offeror alleged that the awardee on a VA electrical services contract lacked the technical expertise required by the solicitation.  Specifically, (among other things) the protest argued that the awardee’s SAM profile did not specifically list the NAICS code applicable to the procurement.

The GAO disagreed and dismissed the protest – stating that it could not identify a regulation requiring an offeror to have a particular NAICS code included in its profile.

So, are SAM profiles back to the Wild West?  Not so fast.  Part of the reason that the GAO dismissed the protest was that the awardee was certified under other NAICS codes requiring the same (or even smaller) size standard.  Also, by taking proper steps to certify under the NAICS codes where your business primarily operates, your business will be in a position to fend off challenges like these altogether.

So, the advice remains the same.  Take the time to check and spruce up your SAM profile (and any other publically available databases listing information about your business).

Small business owners have lots of items on their to-do lists.  In addition to actually running the business, there are many administrative tasks required to make sure that you meet the applicable small business size standards and maintain those standards year-after-year (in order to avoid, or at least minimize, vulnerability to an SBA size protest).

Among the (sometimes admittedly) tedious tasks associated with remaining eligible for small business contract awards is registering in the required government databases.  Over the past five years, this process has been considerably streamlined by the rollout of the System for Award Management (www.SAM.gov).  SAM is a no-cost, government website where contractors must register and provide certain identifying information about their business.

One of the areas covered by a SAM profile is a business’s size – and specifically whether it qualifies as “small” under the applicable size standards.

The importance of paying proper attention to your SAM profile was highlighted in a recent SBA size protest concerning a small business set-aside contract for the lease of two bucket trucks at Marine Base Camp Lejune, North Carolina.

In the protest, a disappointed offeror argued that the awardee did not meet the size qualifications required by the contract.  Although the SBA’s Office of Hearings and Appeals (OHA) found that the protest lacked real specificity (and therefore was subject to being dismissed) – it nevertheless sustained the protest.

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Why did a protest lacking in specifics get OHA’s attention?  It pointed out that the awardee’s SAM profile itself stated that the contractor is not “small” under the contract size standard.  That fact alone was enough for OHA to send the protest back to the SBA area office for further review.

This story should serve as a helpful reminder that even basic information should be reviewed periodically.  The attention to detail will pay off with less headaches in the long run.

Novations are the government contracting equivalent of M&A in the private sector – the process through which a government contract can be transferred from one business to another (without violating the Anti-Assignment Act).

There are many reasons that a novation might be necessary.  A business holding a government contract could be acquired by another business (that now wants to take over and perform the contract).  Or a government contractor could divest assets during a bankruptcy proceeding.  The common denominator is a material change in the identity of the business that will perform under a contract with the government.

The novation process set out in FAR 42.1204 is deceptively simple.  According to this regulation, a formal Novation Agreement is granted when the government determines that the transfer is in the “best interest” of the government and supported by appropriate documentation (set forth in checklist format).

In reality, novation is a fluid and unpredictable process.  But, by thinking proactively about the transfer in advance, you can ease the administrative burden and set your business up for the future successful performance of a new contract.


Plan Ahead (If Possible)

FAR 42.1204 does not establish any timeline or schedule for the novation process.  Even if you have all of your “checklist” documents prepared and ready for primetime, there is no guarantee that your Novation Agreement will get the rubber stamp that you hope for (in fact, it probably won’t).

Look carefully at the contract that is being transferred.  By understanding the expectations and deadlines, you’ll minimize the chance of penalties caused by a longer-than-anticipated novation process.

You Might Not Check Every Box

Just because FAR 42.1204 has a list of required documents does not mean that your business (or the business transferring the contract) will be able to check all of those boxes.  For any number of reasons, there may be a document here or there that is not in your records.

Before creating unnecessary work for yourself, contract the ACO (administrative contracting officer) that will handle the novation.  By discussing your particular circumstances, you may be able to agree on a smaller or different set of documents that will satisfy that government’s process.

But beware.  Exceptions or concessions that are approved for one novation may not work for the next.  Whether it’s a different ACO or a change in the government’s expectations, plan on treating each contract novation like a unique process (which, when you think about it, it is).

Stay Flexible and Be Ready to Supplement

The novation process is marked by a back-and-forth process between the contractor and the government.  The ACO may ask for more – or different – information from what was included in your opening submission (even if you think your information is totally comprehensive).

Contractors that want to improve their proposal drafting skills (and win more contract awards) should always keep an eye on the news and learn from others’ mistakes.  Understanding an agency’s award rationale can provide a competitive advantage and keep you well-positioned to receive the next contract.

And, sometimes, simply following instructions and staying within the lines can make the difference between winning and losing.


Take, for example, a recent GAO decision discussing the merits of an agency’s technical evaluation.  The protest argued that the agency unreasonably overlooked technical details included in the “past performance” and “personal experience” sections of the contractor’s proposal.

The problem with this argument is that the details in question should have been included in the “technical approach” section of the proposal — as indicated in the RFP.  According to the GAO, there is “no merit in the [argument] that the agency should have looked to other proposal sections for information regarding the firm’s technical approach.”

The takeaway here is an easy one – read the RFP instructions carefully and follow them closely.  If technical data or other information is requested by one section of an RFP, provide that specific data in the corresponding section of your proposal.  Don’t assume that – just because you’ve already included the information elsewhere – the agency will take the time and effort to track it down (even if it appeared just a few pages or even paragraphs earlier in the proposal).

The general rule is that you want to make life as easy as possible for the person evaluating your proposal.  Make it a routine best practice to check each proposal for the key elements required by the RFP before hitting send.

The SBA’s new “small business mentor-protégé program” is causing quite a stir.  As we covered yesterday, the new final rule opens the door for all small businesses (not just those in the 8(a) program) to receive assistance from large business mentors – and more importantly – to form mentor-protégé joint ventures to compete for small business set-aside contracts (including those offered under the SBA’s socioeconomic programs, such as WOSB, SDVOSB, and HUBZone) without the danger of affiliation.

This new program is a game-changer for small business owners.  Now, instead of competing for set-aside work against fellow small businesses, you might find yourself up against a JV backed by the might of a large business.  The result is an uneven playing field where a “true” small business is up against a stacked deck.  There is also a paradigm shift for large business owners, as the SBA is now offering unprecedented access to set-aside contracts previously reserved for performance by only small businesses.

The first instinct for many will be to rush out and find a dance partner.  That is, another business —  large or small, as the case may be — to team with so that you’ll be on even footing when competing for those small business set-aside contracts.

But is a teaming arrangement right for your business?  We suggest thinking strategically and looking before you leap.

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Long before the SBA announced its new program, teaming arrangements presented an avenue for businesses (and, in particular, large and small teammates) to uncover new contracting opportunities.  But just because you can get new work through teaming doesn’t necessarily mean that you should.

Before jumping into a new project delivery team, Federal contractors (both large and small) should consider intangibles like chemistry, communication, and cooperation.  Teaming with a business that does not share your corporate values, risk tolerance, or project management approach will undoubtedly negatively affect project performance – and, eventually, your bottom line.

For example, in order to participate in the new SBA program, the parties must submit a written Mentor-Protégé Agreement for review and approval by the SBA.  The Agreement should address the small business protégé’s needs, as well as when and how the large business mentor will address those needs.

This Agreement should not be hastily pulled together to make sure that your new JV is first-in-line when the program opens for business next month.  Instead, we recommend a thoughtful process that considers the wants-and-needs of both the large and small teammate.  A solid foundation will make sure both sides start off on the right foot and have a clear picture of how the relationship will unfold (and hopefully continue).

If you are interested in learning more about successful Federal project delivery teaming, I recommend taking a look at the slides from my recent presentation on the subject.  They may help you find the right path if you are considering jumping into the new mentor-protégé pool.