Parity Rule Stands While Review Is Underway The Office of Management and Budget is telling agencies to follow SBA’s parity rule giving equal treatment on set-asides to 8(a), HUBZone and service-disabled veteran-owned companies – for now. In a memorandum, OMB director Peter Orszag said the administration is reviewing a Government Accountability Office finding that the parity rule is contrary to law. “Pending the results of the review, the applicable SBA ‘parity’ regulations remain binding and in effect as validly-promulgated implementations of the governing statutes,” he wrote. Orszag said he expects the review to be completed this month. In a bid protest decision last year, GAO ruled that HUBZone companies are entitled to first priority in set-asides because the HUBZone law specifies that a contract “shall” be set aside if two or more HUBZone firms are ready and able to perform the work at a fair price. In contrast, the laws governing the 8(a) and SDV programs say contracts “may” be set aside. (SAA, 10/10/09) In May GAO ruled that a contract must be removed from the 8(a) program if two qualified HUBZone businesses are willing and able to do the work. (SAA, 5/15) GAO decisions are not binding on executive-branch agencies, but they can be the basis for future bid protests. SBA argued that the parity rule should stand because it has the legal authority to interpret the Small Business Act, but GAO said SBA’s interpretation “ignores the plain language of the HUBZone statute.” SBA has warned that the GAO decisions would hinder agencies’ efforts to meet small business procurement goals in categories other than HUBZone. Four days before Orszag’s July 10 memo, GAO rejected SBA’s appeal to reconsider its latest decision. Federal procurement officials have said they recognized the inconsistency of language in the laws governing various set-aside programs. They said Congress would have to clear up the confusion.