Government Contracting: Key Developments in October 2024

October 2024 SEWP VI Update: Key Q&A Responses Published

The NASA SEWP VI program has published two batches of Q&A responses to industry comments submitted after May 23, 2024. These responses provide key clarifications and address queries from offerors, supporting their preparation for the SEWP VI procurement process.

Batch 1 Q&A:

• Publication Dates: October 11-15, 2024
• Total Responses: 1,399 comments addressed

Read: Key takeaways from the Batch 1 Q&A

Batch 2 Q&A:

• Publication Date: October 28, 2024
• Total Responses: 1,201 comments addressed

Read: Key takeaways from the Batch 2 Q&A

Ongoing Response Updates:

NASA has confirmed that additional responses will be released in the coming weeks. Offerors whose questions have not yet been addressed are encouraged to refrain from emailing inquiries, as all comments submitted will receive a response in due course.
For more information and to access the published Q&A responses, visit the SEWP VI Website. These updates highlight NASA’s commitment to transparency and continuous support for industry participants in the SEWP VI procurement process.

GSA OASIS+ 8(a) Awards: October 2024 Updates and Notifications – Formal Awards Expected by November 6, 2024

GSA has initiated the first phase of OASIS+ 8(a) apparent awardee notifications. This stage anticipates awarding contracts across seven service domains to 182 small businesses under the 8(a) program, with formal awards and notices to proceed (NTPs) expected to be issued as early as November 6, 2024.

These awards are being issued on a rolling basis, allowing GSA the flexibility to prioritize evaluation and release awards in batches, per the solicitation’s M.3 Basis for Awards. Offerors who do not receive award notifications during the current round are still under evaluation as the rolling awards process continues.

Important Notes for Awardees and Offerors:

• Final Checks in SAM.gov: Apparent awardees should ensure their SAM.gov entity information is active and accurate to facilitate the final responsibility review as per FAR 9.104.
• Contract Performance Period: The formal award will initiate a five-year base period with an optional five-year extension.
• On-Ramping Opportunities: The OASIS+ solicitations are expected to reopen for on-ramping in FY 2025. Prospective offerors who missed the initial proposal submission deadline of October 20, 2023, are encouraged to prepare for submission when the solicitation reopens.

Further Information and Questions:

Questions regarding the award announcements can be submitted via the Google Form linked in the official announcement. Attachments for questions may be emailed directly to the OASIS+ Team at [email protected]. For additional details about the OASIS+ Program, visit the OASIS+ website or join the OASIS+ Interact community. Updates are also available on GSA’s social media channels, including X and LinkedIn.

SBA Inspector General Urges Stricter Verification for Small Business Certification Applicants

The Small Business Administration’s (SBA) Office of Inspector General (OIG) has reiterated its recommendation that the SBA should verify the small business status of companies applying for certification under socioeconomic programs like 8(a), WOSB/EDWOSB, VOSB/SDVOSB, and HUBZone. In a recent report, the OIG raised concerns that the SBA’s practice of accepting self-certification for small business status allows ineligible companies to access funds meant for truly small businesses, which opens the door to potential fraud and abuse.

Key Details:

• Self-Certification Concerns: Despite formal certification being required for these programs, the SBA continues to accept an applicant’s self-certification regarding its small business status in the SAM.gov system. While the SBA verifies other eligibility criteria, such as ownership and control, the OIG believes that relying on self-certification for small business status creates opportunities for non-compliant companies to benefit from federal set-aside contracts.
• Fraud and Abuse Risk: The OIG’s report highlights that the current self-certification practice creates a risk of fraudulent claims, as businesses may claim to be small without proper verification. The OIG argues that Congress intended for the SBA to thoroughly certify applicants’ eligibility for set-aside contracts, including their size status.

The OIG’s push for stricter verification has significant implications for government contractors, particularly those in small business programs:

• Increased Scrutiny: If the SBA adopts the OIG’s recommendations, contractors seeking socioeconomic certifications may face more rigorous scrutiny. This could lead to additional documentation requirements and potentially longer processing times for applications. Contractors should be prepared to submit detailed proof of their small business status beyond what is currently required in SAM.gov.
• Risk of Disqualification: Contractors who have relied on self-certification to gain access to contracts might be at higher risk of disqualification if formal verification is introduced. This could lead to a reduction in available contracting opportunities for companies that fail to meet the new verification standards.
• Delayed Awards: For contractors, any changes to the verification process could delay the timeline for contract awards. As the SBA assesses small business status more thoroughly, it may take longer to approve certifications, which could slow down the awarding of federal contracts.
• Compliance and Competitive Advantage: Contractors that are fully compliant with all small business standards may gain a competitive advantage under a stricter verification regime. Those who have invested in maintaining thorough records and meeting eligibility criteria will likely face fewer obstacles, while competitors who have relied on self-certification may struggle to meet the new requirements.

While the SBA OIG has repeatedly raised concerns about the risk of fraud in socioeconomic certification programs, the SBA has not yet moved toward implementing the suggested changes. If the SBA ultimately rejects the OIG’s recommendations, the current self-certification process will remain in place. However, if Congress intervenes, contractors should expect a more formal verification process to be implemented. Contractors should stay informed of any regulatory updates and prepare for potential changes to the certification process.

Biden-Harris Administration Finalizes Rule to Lower Costs for Small Businesses Through SBA 504 Program

The Biden-Harris Administration has finalized a new rule designed to lower costs for small business owners by simplifying access to debt refinancing through the SBA 504 Loan Program. Announced by SBA Administrator Isabel Casillas Guzman on September 30, 2024, this new rule empowers small businesses to refinance existing debt and access more affordable capital for business expansion or growth. This initiative builds on the Federal Reserve’s September interest rate cut, which has already reduced borrowing costs for small businesses across the country.

Key Changes to the SBA 504 Loan Program:

• Streamlined Debt Refinancing: The rule will simplify the application process for small businesses seeking to refinance their existing loans. It provides greater flexibility in how businesses use loan funds and expands eligibility for 504 loan refinancing, making it easier for small businesses to access capital.
• Expansion of Loan Uses: Small businesses will now have more freedom in using refinancing funds for both physical property (land, buildings, machinery) and business expansion. This could include lowering monthly payments or accessing more capital without increasing their payments.
• Removal of Minimum Loan Payment Reduction: Borrowers will no longer be required to demonstrate a minimum reduction in their loan payment when refinancing. This change allows businesses to make refinancing decisions that best suit their unique financial needs.

Impact of the Rule on Small Businesses:

This rule will lower costs for many small businesses, especially those in rural and underserved communities. By allowing small business owners to refinance their debt, they can reduce monthly payments or free up capital for expansion. For example:

• A small rural call center can now use its land and equipment as leverage to lower debt payments and reinvest in the business.
• A thriving coffee cafe and roastery will have more flexibility in using loan funds to refinance their equipment and expand operations to a new location, all while freeing up savings for reinvestment.

Complementary Savings from Federal Reserve’s Rate Cut:

Small businesses participating in the SBA 7(a) Loan Program, which provides working capital to small businesses, are also seeing the benefits of the Federal Reserve’s September interest rate cut. The reduced rates are expected to result in $360 million in annual savings for 200,000 borrowers, as monthly payments on variable-rate loans drop by 0.5%.

How This Affects Government Contractors:

For government contractors, these changes offer an opportunity to refinance debt incurred from past projects and reinvest in future opportunities. Contractors can use the expanded flexibility of the SBA 504 and 7(a) Loan Programs to lower debt burdens, making them more competitive in securing future contracts. The removal of the minimum loan payment reduction requirement provides further flexibility for contractors seeking to balance long-term capital investments with their operational needs.

Effective Date:

The new rule will officially take effect on November 15, 2024. Small businesses interested in taking advantage of the updated refinancing options can use the SBA Lender Match Tool or contact their local SBA District Office for more information.

HHS Proposed Rule to Update Acquisition Regulation: Public Comment Deadline December 2, 2024

The Department of Health and Human Services (HHS) has published a proposed rule to amend the HHS Acquisition Regulation (HHSAR), with a public comment deadline of December 2, 2024. This proposed rule, issued on October 3, 2024, aims to streamline HHS’s acquisition policies, align them more closely with the Federal Acquisition Regulation (FAR), and incorporate unique HHS-specific requirements.

Key Details:

• Alignment with FAR: This update will align the HHSAR more closely with the FAR, removing outdated and redundant policies and adopting compliant language and structure, making the acquisition process more efficient for HHS.
• Implementation of HHS-Specific Requirements: The proposed rule includes new provisions that address HHS’s mission-specific needs, such as updated dollar thresholds, position titles, and organizational changes.
• Creation of HHS Acquisition Manual (HHSAM): HHS is establishing an HHS Acquisition Manual (HHSAM) to centralize internal procedural guidance, making the HHSAR more focused on public-facing rules and requirements.
• Comment Deadline: Public comments must be submitted by December 2, 2024. These comments will be considered in finalizing the rule.
• How to Comment: Feedback can be submitted through the Federal eRulemaking Portal under HHSAR Case 2023-002.

The revised HHSAR will offer more clarity in HHS’s contracting processes, making it easier for contractors to comply with updated rules. Contractors are encouraged to review the proposed rule and submit comments by December 2, 2024 to help shape the final version of the HHSAR. For more information, visit the Federal Register page for the proposed rule.

Proposed DFARS Rule Update: 8(a) Program Joint Venture Eligibility and Nonmanufacturer Rule – Public Comment Deadline December 9, 2024

The Department of Defense (DoD) has proposed amendments to the Defense Federal Acquisition Regulation Supplement (DFARS) that would revise joint venture eligibility requirements and clarify the nonmanufacturer rule for 8(a) contracts under the 8(a) Partnership Agreement between the DoD and the Small Business Administration (SBA). The rule, released on October 10, 2024, aims to align the DFARS more closely with the Federal Acquisition Regulation (FAR).

Key Changes Proposed in DFARS Case 2024-D025:

• Joint Venture Eligibility: The proposed rule would modify the DFARS clause at 252.219-7010, allowing joint ventures that include 8(a) program participants to qualify for 8(a) Program acquisitions processed under the DoD-SBA Partnership Agreement. Joint ventures must include at least one SBA-certified 8(a) participant who meets specific criteria.
• Nonmanufacturer Rule Adjustment: The rule proposes to remove nonmanufacturer rule requirements specific to 8(a) participants in DFARS to align with the FAR’s requirements for all socioeconomic categories. Additionally, it removes the kit assembler rule set, ensuring consistency with the FAR.

The proposed changes impact 8(a) participants, including joint ventures, by refining eligibility requirements and removing duplicative rules. Key benefits include:

• Expanded Joint Venture Opportunities: Eligible joint ventures involving 8(a) participants and mentors/protégés can bid on DoD 8(a) Program contracts. This expansion provides more avenues for 8(a) firms to collaborate with established partners and compete for contracts under the DoD-SBA agreement.
• Simplified Compliance with Nonmanufacturer Rule: By aligning with FAR standards, the DFARS eliminates redundant nonmanufacturer rule requirements, streamlining compliance for 8(a) businesses and reducing administrative burdens.
• Comment Submission Deadline: Public comments on the proposed rule must be submitted by December 9, 2024. Comments may be submitted through the Federal eRulemaking Portal (DFARS Case 2024-D025) or via email at [email protected].
• Expected Finalization: After the comment period, DoD will review feedback to shape the final rule.

This proposed rule offers new opportunities for 8(a) businesses to participate in DoD contracts and aligns DFARS requirements more closely with the FAR, benefiting government contractors by reducing complexity and promoting collaboration through joint ventures. Contractors are encouraged to review the rule and submit feedback by December 9, 2024.

SBA Proposes Rule to Expand “Rule of Two” to Multiple-Award Contracts – Comment Deadline December 24, 2024

The Small Business Administration (SBA) has issued a proposed rule to expand the application of the “Rule of Two” to multiple-award contract task and delivery orders, aiming to increase small business participation in federal contracting. This proposed rule, which has a public comment deadline of December 24, 2024, specifies that agencies must set aside orders under multiple-award contracts for small businesses if there is a reasonable expectation of receiving offers from at least two small-business contract holders that are competitive in price, quality, and delivery.

Key Highlights of the Proposed Rule:

• Expansion of the Rule of Two: Traditionally applied to single-award contracts, the Rule of Two would now apply to task and delivery orders under multiple-award contracts. This requires agencies to set aside orders for small businesses whenever two or more small business contractors are expected to submit competitive bids.
• Documentation Requirements: If an agency chooses not to apply the Rule of Two, it must document the rationale and share this with the agency’s small business specialist or the Office of Small and Disadvantaged Business Utilization (OSDBU) or, in the case of the Department of Defense (DoD), the Office of Small Business Programs (OSBP).
• Exceptions to the Rule: The rule includes exceptions for certain contract vehicles, such as orders under the Federal Supply Schedule or where specific exceptions apply. Agencies unable to set aside an order above the micro-purchase threshold must provide documentation justifying the decision.

This proposed rule represents a significant opportunity for small business contractors. By expanding the Rule of Two to include multiple-award contracts, the SBA aims to increase small business access to federal contracting opportunities, particularly through task and delivery orders. This change could lead to:

• Increased Contracting Opportunities: Small businesses will have a greater chance to compete for orders within multiple-award contracts, expanding their presence in the federal marketplace.
• Streamlined Access to Multiple-Award Contracts: With the Rule of Two applying to task orders, small business contractors may find it easier to secure work without the need for agencies to create additional single-award set-aside contracts.