Weekly Update for Government Contractors and Commercial Businesses– June 2022

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GOVERNMENT CONTRACTS

PilieroMazza’s Cy Alba Testifies Before House Committee: Are Governmentwide Contracts Helping or Hurting Small Contractors? Cy Alba, 06.15.22
On June 14, 2022, PilieroMazza’s Isaias “Cy” Alba, a partner in the Firm’s Government Contracts Group, testified before the House Committee on Small Business to advocate for the rights of small business government contractors in procurement contracts. Specifically, the hearing examined governmentwide contracts, including the Best-In-Class contracts that originate from the Category Management initiative, and assessed their impact on the federal small business base. In his testimony, Cy discussed potential solutions to reduce the barriers to entry for small businesses as it pertains to such contracts. Read more here.

Small Business Set Asides Now Allowed Outside the U.S.: What You Need to Know, Sam Finnerty, 06.10.22
Effective May 26, 2022, the Federal Acquisition Regulation (FAR) gives contracting officers the discretion to apply the Small Business Act—implemented by FAR Part 19—outside the United States and its outlying areas. This final rule could create significant business opportunities for small business government contractors capable of competing for overseas procurements. Read more here.

Small Business Size Standards: Termination of Nonmanufacturer Rule Class Waiver
Effective immediately, the Small Business Administration (SBA) is terminating a class waiver of the Nonmanufacturer Rule (NMR) for:

  • Furniture Frames and Parts, Metal, Manufacturing under North American Industry Classification System (NAICS) code 337215 and Product Service Code (PSC) 7195;

  • Furniture Frames, Wood, Manufacturing under NAICS code 337215 and PSC 7195;

  • Furniture Parts, Finished Plastics, Manufacturing under NAICS code 337215 and PSC 7195; Furniture, Factory-type (e.g., cabinets, stools, tool stands, work benches), Manufacturing under NAICS code 337127 and PSC 7110;

  • Furniture, Hospital (e.g., hospital beds, operating room furniture) Manufacturing under NAICS code 339113 and PSC 7195; and

  • Furniture, Laboratory-type (e.g., benches, cabinets, stools, tables) Manufacturing under NAICS code 337127 and PSC 7195.

Since the class waiver is terminated, small businesses will no longer be authorized to provide the product of any manufacturer regardless of size on the identified items, unless a Federal Contracting Officer obtains an individual waiver to the NMR. Read more here.

Small Business Size Standards: Wholesale Trade and Retail Trade
Effective July 14, 2022, the Small Business Administration (SBA) is increasing its receipts-based and employee-based small business size standards for North American Industry Classification System (NAICS) sectors related to Wholesale Trade and Retail Trade. Specifically, SBA is increasing size standards for 57 industries in those sectors, including 22 industries in NAICS Sector 42, Wholesale Trade, and 35 industries in NAICS Sector 44-45, Retail Trade. Read more here.

Small Business Size Standards: Calculation of Number of Employees for All Programs and of Average Annual Receipts in the Business Loan, Disaster Loan, and Small Business Investment Company Programs
Effective July 6, 2022, the Small Business Administration (SBA) is adopting a 24-month average to calculate a business concern’s number of employees for eligibility purposes in all of SBA’s programs. SBA is also permitting business concerns in its Business Loan, Disaster Loan, Surety Bond, and Small Business Investment Company (SBIC) Programs to use a five-year averaging period, in addition to the existing three-year averaging period, for the purposes of calculating average annual receipts. These changes will allow larger small businesses to retain their small business size status for longer, and some mid-sized businesses to regain their small business status. Read more here.

The Office of Inspector General’s Audit Strategy
A recent Department of Energy (DOE) Acquisition Letter provides guidance regarding the most significant roles of the contractor and of Government officials in the Office of Inspector General’s audit strategy for management and operating contracts. The guidance only applies to DOE Contracting Officers; it discusses their and other DOE officials’ roles and their associated responsibilities in the audit strategy. Here

More Reality Checks Could Help Keep Defense Programs on Time and Budget, GAO Says
Is the lack of reality checks making Defense Department weapons programs cost too much and take too long? A new report released from the Government Accountability Office suggests so. The report looks at how often and how well Pentagon officials who design and execute arms programs use knowledge-based acquisition processes—essentially, a set of steps to make sure that program managers’ expectations are in line with reality and that they aren’t fooling themselves (and potentially the whole Department) about how costly and complicated certain things will be to make. Those practices include things like using analysis to gauge the current state of technology before starting a program that uses new or emerging technologies, identifying gaps between requirements and resources, and basically establishing key points in the process, called knowledge points, by which certain things should be known before continuing on to the next phase. Read more here.

Priority Open Recommendations: Small Business Administration
A recent Government Accountability Office (GAO) report outlines their 15 priority open recommendations for the Small Business Administration as of June 2022. Priority open recommendations are the GAO recommendations that warrant priority attention from heads of key departments or agencies because their implementation could save large amounts of money; improve congressional or executive branch decision-making on major issues; eliminate mismanagement, fraud, and abuse; or ensure that programs comply with laws and funds are legally spent, among other benefits. Read more here.

GSA Strengthens Supply Chain with New Monitoring Process to Bolster Federal Marketplace
The General Services Administration (GSA) announced progress in its ongoing efforts to strengthen the federal supply chain and reduce supply chain risk by using its Verified Products Portal (VPP) to monitor and remove products from unauthorized suppliers. Launched in 2020, the VPP is a manufacturer- and wholesaler-facing portal for authoritative product content such as standardized part numbers, product specifications, and supplier authorization information. Working with industry, GSA recently identified and removed approximately 75,000 items offered by unauthorized suppliers from GSA Advantage! as part of a pilot test. Read more here.

Upcoming Government Contracts Presentations

EVENT: Grow or Go: Small Business Lifecycle Maturity, June 20, Meghan Leemon. Read more here.

WEBINAR: FAR Session 13, Parts 19 & 26, June 22, Cy Alba. Read more here.

WEBINAR: How to Use and Protect your Intellectual Property When Performing Federal Contracts, June 28, Cy Alba. Read more here.

WEBINAR: Understanding and Avoiding Affiliation for Small Business Government Contractors, June 28, Katie Burrows. Read more here.

WEBINAR: FCA Implications for M&A Transactions, June 29, Cy Alba and Matt Feinberg. Read more here.

WEBINAR: Legal Insight on Understanding Small Business Subcontracting, June 30, Kevin Barnett and Eric Valle. Read more here.

WEBINAR: Limitations on Subcontracting: Key Updates and Tips for Compliance, June 30, Meghan Leemon. Read more here.

EVENT: Cyber Preparedness and Its Impacts on Your Bottom Line, July 13, Dave Shafer. Read more here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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