Top 20 Small Business Federal Contracting Stories of 2020 - Pt I

      The new year has arrived, and it’s time for Set-Aside Alert to count down the top small business federal contracting stories of the tumultuous year that just ended. Here they are, in order of priority:

#1 - COVID-19 Pandemic

      Small business federal contractors got hit hard by the COVID-19 pandemic. The virus arrived with a flurry of new rules, delays and uncertainties, as well as telework flexibilities and new loans, and many government agencies appeared to cope fairly well. The CARES Act pandemic stimulus package brought in Paycheck Protection Act (PPP) loans, Economic Injury Disaster Loans (EIDL) and the Defense Dept.’s Section 3610 reimbursements. While the PPP and EIDL have been widely criticized for apparently high levels of fraud and abuse, they nonetheless brought aid to many thousands of small firms.

#2 - The Presidential Election

      The election of Democratic candidate Joe Biden on Nov. 3 brings a new agenda to the executive branch. One area of focus is small disadvantaged business contracting. Biden has announced plans to triple the federal goal for procurements from small disadvantaged firms to 15%, up from 5%.

#3 - Set-asides shrinking

      In a series of exclusive analyses of government data sets performed by Set-Aside Alert, it was revealed that the value of federal small business set-asides fell dramatically in almost every category in the last three years. This occurred even though the value of all small business federal procurement, and of all federal procurement, rose during the fiscal 2017-2019 period. But set-asides suffered. Small business set-aside value dropped by 37% during the period; competitive 8(a) set-asides, down 57%; HUBZone set-asides, down 52%; and SDVOSB set-asides, down 24%. Women-owned small business (WOSB) set-asides were the only category that achieved an increase in value during the period; the value of WOSB set-asides rose by 6% during the period.

#4 New leadership at SBA

      On Jan. 7, 2020, Jovita Carranza was confirmed as the new administrator of the Small Business Administration. The position had been vacant for more than eight months after Linda McMahon left in April 2019. Carranza spent most of the year administering hundreds of billions of dollars in loans under the PPP and EIDL programs. Those loan programs have been found rife with possible fraud and abuse, including a study by the New York Times that found that the top 1% of borrowers received 25% of the funds in the PPP program.

      In addition, on July 17 the SBA announced that Francis Spampinato was the agency’s new associate administrator for government contracting and business development. He replaced Robb Wong, who left on March 1.

#5 Self-certifications end for WOSBs

      As of Oct. 16, women-owned small businesses no longer have the option of self-certifying as such with the SBA. They have two choices: either certify through SBA’s Certify website or utilize one of four organizations.

#6 Procurement Scorecard for FY2019

      The SBA’s release of the Small Business Procurement Scorecard is always big news, and this year was no different. Small business procurements rose to a record high of $132.9 billion in fiscal 2019, comprising 26.5% of all eligible procurements. Total federal contract spending also hit a historic high of $578.4 billion.

#7 SBA Mentor-Protege, JV, 8(a) Regulatory Overhaul

      The SBA implemented a major overhaul of its mentor-protege programs, 8(a) program and Joint Venture rules in November. The 8(a) Mentor-Protege program was eliminated and merged within the All Small Mentor-Protege Program, among other changes.

#8 SBDCs, WBCs funding boost

      The SBA’s entrepreneurial development programs got a huge boost in funding in the CARES Act stimulus law in April. Congress more than doubled the previous fiscal 2020 allocation of $239 million for the programs, raising total funding to $504 million.

      The SBA’s 63 Small Business Development Centers (SBDCs) got $327 million, and Women’s Business Centers (WBCs) got $70.5 million. Both were more than double what was previously appropriated prior to the CARES Act.

#9 SBA’s “Certify” not effective

      The SBA’s Certify.sba.gov website has failed to meet expectations and will be migrated to another platform, the Office of Inspector General said in a July report. SBA spent more than $30 million on the website but was not able to deliver the desired functionality, the OIG wrote.

      “It does not have many of the essential search, analytical and reporting tools it was supposed to have,” the OIG report said. “Since Certify’s introduction, SBA’s contracting programs have experienced delays in screening and approving applications, monitoring participant progress and terminating non-compliant 8(a) firms,” the report said.

      The project did not have appropriate planning or oversight for several years, OIG concluded. The SBA now plans to move the website to an unspecified online platform.

#10 OIG questions legality of HUBZone, 8(a) changes

      The SBA’s OIG says several recent rule changes may be legally questionable. For example, SBA’s recent HUBZone regulation loosening the requirement for employee residency appears to run contrary to the law authorizing the HUBZone program, said the OIG report, “Top Management and Performance Challenges Facing the SBA.”

      Additionally, the recent regulation that lifted the allowed net worth for 8(a) Business Development Program applicants to $750,000, up from $250,000, also appears to be of questionable legality, the OIG said. The 8(a) net worth change was not based on empirical evidence to conform to the law authorizing the 8(a) program, the report said.

What’s in the new stimulus?

Consolidated Appropriations

Biden plans boost for Native biz

Top 20 Small Business Federal Contracting Stories of 2020 - Pt I

Left out of stimulus bill

Buy Indian Act proposed rule

GSA updates, adds PSCs

Column: PPP Round Deux: Who Qualifies, for How Much, and Forgiveness Changes

Washington Insider:

Coronavirus Update