Right after Election Day, Matt Schoonover of Schoonover & Moriarty and I spoke before a live audience at the SAME Small Business Conference in Charlotte. We discussed what the fate of the SBA size-standard proposal looks like after the midterms and what a Democratic majority might do with the 8(a) program. Then the audience had some really thought-provoking questions about veterans education, OTAs, and how to grapple with constant change.
Please sponsor my marathon! On Saturday, November 14, I’m running the Rivers & Rails Marathon in Brunswick, Md., to raise money for the Capital Area Food Bank. My company, Sam Le Law PLLC, will match every donation made by November 28. That match turns each $1 into 4 meals for families in D.C., Northern Virginia, and Maryland. Please donate here: https://give.capitalareafoodbank.org/fundraiser/7704998.
Links
SAME Small Business Conference
https://www.samesbc.org
Schoonover & Moriarty http://schoonoverlawfirm.com
https://www.apexaccelerators.us
MySBA Certifications Knowledge Base https://sbaone.atlassian.net/wiki/spaces/UCPUKB/overview?homepageId=3085172979
Proposed rule, 91 Fed. Reg. 53741 (Docket SBA-2026-0199): https://www.federalregister.gov/documents/2026/08/20/2026-17042/small-business-size-standards
60-day extension notice, which moves the comment deadline to November 20, 2026: https://www.federalregister.gov/documents/2026/09/24/2026-19546/small-business-size-standards
Place-Based Federal Procurement and Resident Jobs: Lessons from the Historically Underutilized Business Zone Program https://www.clevelandfed.org/publications/working-paper/2026/wp-2632-place-based-federal-procurement-and-resident-jobs
Chapters
0:00 Welcome and Election Night in Kansas
3:21 Size Standards and the Delay Into 2027
4:25 Predicting the Final Size Standards
6:19 Three Ways a Divided Congress Can Act
10:30 The 8(a) Data Call: Suspensions and Appeals
12:48 Fraud, Voter Turnout, and the 8(a) Program
14:31 Death by a Thousand Paper Cuts: Can the 8(a) Program Survive?
17:53 Why Small Businesses Should Support Every SBA Program
21:11 Audience Question: Why Are the Proposed Size Standards So High?
26:16 Audience Question: Advice for a Constantly Changing Market
34:13 Audience Questions: OTAs, GSA Schedules, and Fraud Investigations
38:55 Audience Question: SDVOSB Certification at SBA
42:40 Closing
Transcript
Welcome and Election Night in Kansas
Sam: Welcome to GovCon Intelligence. We’re recording live on location from the SAME Small Business Conference in Charlotte, North Carolina, at the Charlotte Convention Center. I’m here with Matt Schoonover from Schoonover & Moriarty out of Kansas. And we’re going to, first of all, talk about the post-election ramifications of what happened last night. We were recording on Wednesday after the Tuesday election. And then we’ll take questions from the audience here at SAME. So, Matt, you’re in Kansas. Welcome to being a purple state. Big developments in Kansas last night with the governor’s race and the Senate race, as you think through that and the sweeping victories across the country for Democrats, the Senate, the House.
What are the broader implications politically? But what are the implications in our little area of the world with small business contracting? And let me just note, Matt is actually an office holder in Kansas. So why don’t you start by telling us whether you had an election?
Matt: I did not. Well, first of all, let me say, SAME, thank you so much for hosting. Thank you for allowing me to be here. SAME, SBC, Lori and your team, thank you for allowing us to do this. Very unique. And so we’re excited to speak with everybody. Yes. Last night, this morning. I haven’t checked the news here in a few hours yet. So I’m not sure if they’ve called any other races, but I was certainly surprised at the level of kind of blue tsunami that it actually ended up being. And I will say this, I watched a little bit of Fox News last night when the coverage was coming in. I was watching when the president was speaking on Fox News, and I was very disappointed he did not actually talk about the impact that the election will have on size standards. I know that’s—
Sam: That’s on top of everybody’s mind. That’s what I was thinking.
Matt: I thought, okay, Fox News host, let’s get to the real question and say, what is this going to do to the regulations? But I don’t know to the extent anybody has a crystal ball, but I would assume that we are going to see more oversight of an administration that up until now, over the last several years hasn’t really been subject to much oversight. And so hopefully as part of that process, I’m not saying from the investigative side or anything like that, but from the small business side. Hopefully now there will be more of a give and take, more of a collaborative effort to amend some of these rules and these regulations, which I think everybody probably agrees needed to be updated in a large or in most context.
And so hopefully now we’ll see a little bit more cooperation, a little bit more dialog when it comes to that, rather than feeling like some of these changes are being forced.
Size Standards and the Delay Into 2027
Sam: Right on that. You had very quick comment periods on both the 8(a) rule and then on the size standards rule. The size standards rule eventually was extended 60 days, which pushes it past the midterm elections. And that may have been behind SBA’s thinking of extending it by 60 days in November 20th to see what would happen here.
Matt: Exactly. And problematically, though, I think the extension was a good thing. It allows more people to comment and allows SBA to have more insight. But I think problematically for a lot of small businesses, it now realistically takes the implementation side into 2027. So when we talk about size standards. If a business’s fiscal year closed with the calendar year and the size standards changed as a result of the rules, maybe there would have been an easier impact on some businesses, but now we may be delaying it even more just by virtue of completed fiscal year timing.
Predicting the Final Size Standards
Sam: That’s true. And we’re here in a crowd of engineering companies. And they were proposed in 2025 to have a slight increase in their size standard. And that would have helped some firms if it had been implemented either in that year or even in 2026. But now we’re looking at 2027 for some sort of finalization, and we don’t know what it will be, will be a modest increase will be a large increase. What are you predicting?
Matt: What am I predicting? As we stand right now, I think some of these NAICS codes have a ten-times multiplier on basically what the current NAICS code is. Some of these NAICS codes are now going to employee-based size standards. Some of the concern that we’ve heard the loudest actually is in the construction community, where you’re taking size standards that might have been $45 million ish at the max, and now it’s a 5 or 600 person size standard, where realistically, that’s a half billion dollar, billion dollar construction company. And so that’s really been what most of the concern that we’ve heard has been certainly on the construction side.
My particular prediction is I think the final rule will be tempered. I think we’re going to see some increases and I think we should see some increases. I don’t think that there’s really any dispute that a lot of these size standards were pretty low. But I don’t think—and this is just a hunch, I’m basing this on nothing—I don’t think construction is going to go to a 600 person.
Sam: And higher.
Matt: I think it’ll still say a dollar value. But I know a lot of businesses were very scared. What about you? What are you thinking?
Three Ways a Divided Congress Can Act
Sam: Well, I see three levers that the new Congress can take to influence this policy, size standards, and other small-business policies. And we’ll get into the audit as well. One is the point that you made and that President Trump mentioned last night in interviews, that the administration is looking to make an effort to be collaborative with this Congress, and maybe they will try to work together on legislation. One hopes that they’re looking all of them out for the best of the country. And working together may mean some sort of compromise on this and other issues. So that’s very simple. That could have happened in the last Congress.
But because Republicans had the majorities in both houses really wasn’t a need to work with congressional Democrats. Now, in order to get anything passed, you need to work with congressional Democrats. So you could see some effort there on the legislative side.
Second is hearings and oversight. So there could be questions about how did SBA come up with this methodology and these numbers. And I’ve put together a couple of podcasts and articles now on how the mechanics of all these numbers work. I used to be the head of the office that did size standards. And there’s there is a lot of science to it, but they’re also was when I was there and art to it as well.
You just pick a number where you say at this level, you don’t think that businesses really can realistically be considered small. And we would say, I think that was 47.5 million, and now you have size standards that are 500 million or so you have much larger.
And then the third is just having budget authority. There’s a continuing resolution that runs out December 11th. You would expect most likely that this Congress will punt to the next Congress, maybe extended by a month or so, and then the next Congress may come in and they can put in conditions on the budget about finalizing certain rules or not. We’ve seen that in the past with the COVID rules that SBA had on affiliation, and they could put statements into conference reports on the budget.
So using that authority would be a fairly simple way for congressional Democrats, who so far have come out against what SBA is proposed entirely at. Markey has said that, the Virginia congressional delegation has said that, so they could put something into the next congressional budget.
Or they could actually they could shut down the government. It’s when you have divided government, you have seen shutdowns in the past. And this office at SBA that runs the size standards is runs off of normal budget authority. So if they were to shut down the government, that would seem to prevent SBA from finalizing. I think at least three mechanisms there.
Matt: We don’t think that the congressional Democrats would shut it down over size standards. Is this the hill we’re going to die on? No, I don’t think that they would. I think it would probably be a broader disagreement about how the government is functioning. And I think one thing is we’re all about to be a lot more versed in executive privilege and the unitary executive theory, all of these things that I think are probably going to be—
Sam: Even in your Supreme Court case—
Matt: I have, or reading tweets about Supreme Court case law.
Sam: That’s the best way. Exactly right. Law students out there.
Matt: So but I mean, it’s certainly going to be interesting. I don’t—we’ll see who the leaders of the House and Senate small business committees are as new Congress takes over. But certainly I think there’s no reason to think that things won’t be more collaborative than they’ve been thus far.
The 8(a) Data Call: Suspensions and Appeals
Sam: It’s nowhere else to go but up on that. Before we get to questions from the people in the room, I did want to ask you about the 8(a) audits. We first you’re actually my first guest to appear on the show a second time. The second year, second appearance on the show. The first time we were talking about the 8(a) data call. That was in December of last year when SBA first sent out the list of questions 13 documents over three years to 8(a) firms. And we’ve given companies advice on how to do that. So we’re almost a full year out. It’s like ten months, 10 to 11 months out from the data call. What have you seen from the data call and what have you heard about what SBA might be planning next?
Matt: Well, most of what I’ve seen is actually on GovCon Intelligence. But I will—
Sam: I’ll pay you later.
Matt: Thank you, thank you. As we’re coming out of the data call now. So we’re kind of in the suspension and appeal phase. It feels like we have companies that didn’t respond to the data call or didn’t sufficiently respond to the data call, SBA went through the process of suspending them from the program. And so now a lot of companies have been appealing those suspensions, and there have been cases that have been coming out. It seems like largely a lot of those cases are being resolved. Amicably between SBA and the suspended party, where SBA is going to lift the suspension and companies maybe going to provide documents, or they did provide documents and SBA didn’t see them, or it wasn’t in the right format or something like that, where it seems like we’re getting some resolution there, I think. And you’ve reported on these numbers, we’re down about a quarter of the program from what it was.
Sam: Almost 1000 lost.
Matt: Yes. So I think SBA has largely accomplished what I think its goal probably was in going through the data call and some of these subsequent requests from companies is making sure that the low-hanging fruit, the companies that really shouldn’t be in the program are probably removed from the program.
Fraud, Voter Turnout, and the 8(a) Program
Sam: It would be interesting to see if there’s any influence from last night’s election into how SBA treats the 8(a) program and its fraud investigations going forward. One thing you saw out of the exit polls is a lot of voters were concerned about corruption and fraud, and this is certainly an anti-fraud measure from SBA. That’s how they were selling the data call in the first place. And they pointed to DOJ investigations. So maybe they continue it to show that we are addressing fraud in our programs. And we start with 8(a), and it could extend to some of the other programs as well. There was even OIG audit about the limitation on subcontracting, which affects all the programs.
But another part of it is you saw really high minority turnout. Mississippi, Georgia and Texas as well. And previously the 8(a) program had been a minority contracting program, but that was overturned in the Ultima case. And I wonder now that you kind of have it both ways. You still have a good number of minority-owned applicants in the program, but now you’ve opened up the door through some of SBA’s administrative actions to other types of ownership in the 8(a) program. So does SBA treat the program differently because they’re looking to build more members of the coalition politically, or do they treat it differently just because now administratively, they’ve shifted the program from being the former minority business program to now socially disadvantaged program.
Death by a Thousand Paper Cuts: Can the 8(a) Program Survive?
Matt: And it’s a great question. It kind of goes back to when the Trump administration first came in, in Trump 2.0, I guess I should say when the Ultima decision came out, that was before the second Trump. But obviously the concern with DEI and all of these things that the Trump administration was talking about, a lot of the questions were, are they going to get rid of the 8(a) program? And of course, the 8(a) program is statutory. They can’t necessarily get rid of the 8(a) program itself, but they can kind of death by a thousand paper cuts, where the administrator of the SBA has tremendous powers under the Small Business Act to administer the program in different ways that he or she may see fit.
And so the I think the more realistic concern wasn’t, is the 8(a) program going to go away, but functionally, is the 8(a) program going to be squashed in a meaningful way? And I think that concern is still very legitimate. We will see. It will all depend, I think, on how much Congress pushes back on the administration and, quite frankly, how much the administration is receptive to that pushback. They may say, we don’t care. They’ve taken that approach with a few things in the past, but it’s all going to depend on Congress. I think we’ve seen what the administration’s intentions are with the 8(a) program.
Sam: And historically, particularly on the House side in the Small Business Committee, they’ve been very strong proponent of federal contracting and the 8(a) program. The ranking member, Nydia Velázquez, is retiring. So you’ll have a new chair of the House Small Business Committee when the new Congress starts in January. But they’ve been extremely supportive of the 8(a) program, and I don’t think it’s something where they would just allow the administration’s actions and really the rhetoric. I think that’s really what has been most impactful on the 8(a) program, not even the actual administrative changes or regulations, but the rhetoric around the program. I don’t think they’ll allow that to just go without challenge.
Matt: I hope not, because I think there’s been obviously the 8(a) program has been maligned. I think it’s been maligned, personally, rather unfairly. Certainly, again, that’s a program where I think most reasonable people would say we need to make some changes to the rules in the regulations. We need to make some changes to how SBA is going to continue to monitor your compliance with the regulations going forward. But this demonization of the 8(a) program and 8(a) program participants, I think Secretary Hegseth and his sledgehammer video. What did he say? It was the worst offending DEI program in the government or something along those lines.
Sam: The oldest DEI program in the government?
Matt: Yeah. And so I certainly hope that they do push back on that and that we remember that what this program was designed for and the benefits that it does bring to 8(a) companies.
Why Small Businesses Should Support Every SBA Program
Sam: I’ve been looking at the statistics. That’s one of the jobs I had at SBA was just to track all the statistics on how much money was going to small businesses, how much money was going to 8(a), and the numbers were going up and up, and they went down slightly in 2025, most likely because of DOGE. And we don’t have the numbers yet for 2026. But what we saw is as the 8(a) program goes up, small businesses go up. So the rising tide lifts all boats on the SBA programs, and it’s hard to just pick one program over another. So if an agency is not going to go 8(a), maybe they don’t go small business at all. They go full and open instead of going to go into a small business program.
So I think it’s incumbent on all small businesses to support the SBA programs, and is good to see that SBA is making changes. They replied to the Ultima decision by opening up social disadvantage. So it’s not that they’ve tried to kill the 8(a) program, they’re just trying to change it to mold the way the administration wants and to comply with the court orders.
Matt: And I will say one thing that I think small businesses could do better is advocating for themselves and advocating for themselves, not only with SBA, but also with their representatives. These SBA programs, at the end of the day, are about jobs. They’re bringing jobs to congressional districts. They’re bringing dollars to congressional districts. Representatives need to know that. They need to know what the impact of these programs are back home in terms of dollars, in terms of jobs, so that way, the 8(a) program isn’t just or any of the SBA’s programs aren’t just some acronym for bureaucrats to have in Washington. It’s these representatives know how important these programs are to the places that they represent.
Sam: And even more important now, as you have divided government. Exactly. So many different members that are looking at this and potentially being able to score political points as you get closer to the next election, 2028. I’m sure you know—
Matt: Are we already talking about 2028?
Sam: Well, I’m going to talk about it just because I was in SBA for a long time, and midterms were a really big deal. And you have to remember, the people who are running these programs are political appointees, which often means they worked in think tanks or they worked on campaigns before they came. So these are people that are really tuned into politics. They’re paying very close attention to what happens in midterms and what happens elsewhere. So SBA, of course, we’ve been joking about it is not a huge mover in terms of votes, but they’re going to do what they can. So they really should be looking at these issues that we’re talking about.
8(a) programs, small-business size standards in terms of what it means for doing good for the American people, but how that translates into whatever the next map looks like. So let’s take some questions from the audience here at SAME. Please let us know if you have any questions.
Audience Question: Why Are the Proposed Size Standards So High?
Audience: I know there’s a lot of concerns with small businesses with the size standard changes that are happening, and a few of them are just wondering, I guess, and your personal opinion, I know the reasons that are out there, but the unrealistic change, especially you mentioned construction from 50 million to 600. What was the purpose behind that? Because in reality, if you think about small businesses, it’s not to build the backbone of America. Extending it to something that drastic is not something that is known businesses. So what do you think, in your personal opinion, what was the purpose behind that?
Sam: My personal opinion is that the numbers are off from how SBA had done it in the past, but I’ll address what SBA actually said in their proposed rule, which is that SBA saw that Congress had done a hearing about size standards, and there were firms that wanted higher size standards, firms that said, we’re about to get into midsize, and these size standards don’t allow us to grow. I think specifically it was value-added resellers. There was another industry that was in there as well, services industry. And so SBA was looking for a way to allow companies to continue to grow when they’ve gotten past the normal, the current small business size standard where you get into though, is now what number do you pick?
Is it something that’s maybe 10% more, which is what SBA proposed in 2025? Is it something that 1,500% more, which is what you’re looking at here, or potentially even more when you’re talking about construction? And I think the key number that SBA said is, at least on the services side, $500 million is a reasonable size standard, $500 million in a I think in a $2 billion industry. They said it’s a reasonable size standard. That’s just round numbers. There’s not really anything to back that up. So SBA could very easily kind of pull this back a little bit by saying maybe not 500, but 100 or 75 or 50, rather than going all the way to 500 and same on the employee side, saying 1000 is a reasonable size standard on the employee side.
Matt: What’s the old saying? Never ascribe to malice what can be explained through incompetence. And I want to say that’s not me saying SBA is incompetent per se when it comes to—they’re certainly very, very competent. I think maybe my optically informed—maybe a better way to say it—where I think what the problem ultimately comes down to is under the Small Business Act, there’s two sizes of businesses. There’s a mom and pop, single employee business, brand new business, and there’s Lockheed Martin or there’s Bechtel, whatever. Whatever the large multinational conglomerate is. And to Sam’s point, I think SBA was trying to solve that problem where they’ve got companies that are realistically in the middle somewhere that maybe themselves are as they graduate size standard, are having a hard time competing in the unrestricted or the full and open world.
And I think that they were trying to help solve that problem. I take them at their word that that’s what they were trying to do. I think the issue is, and where a lot of concern is my perception is they were thinking about it only from that context and saying, okay, well, look, if we create all of these new small businesses, if we bring more people back into the small business realm, we’re going to have more competition and this is going to be a better thing. And I think where they haven’t quite heard, the concern is existing small businesses in a lot of context are saying, well, wait a second. Now you want me to compete against this 600-employee construction company, how in the world am I going to do that?
And so they haven’t necessarily thought about it or at least from outside appearances. It doesn’t seem that they’ve thought about it from that side of things. They’ve identified the issue. And that is we need to make I don’t want to say life easier, but we need to make contracting easier to include more of these mid-tier businesses. The problem is they don’t really have a good mechanism to do that. And it’s a square peg and round hole situation where I think they’ve added some companies as small businesses to give them the benefits that really aren’t designed to be small businesses under these programs.
Audience Question: Advice for a Constantly Changing Market
Audience: Bri Jones for Martinez, we’re a small general contractor. I just had a sort of a two-part question. One is, what keeps going through my head is the only constant is change. Right. And I when you say that your graduated 8(a), graduated in 2024. And when you say that it’s the 8(a) program is sort of like 5000 cuts through regulation or through audits or through whatever. Whatever you want to call it. Is there a way in 2028 if a new administration comes in? Is there a way that gets put back into the blocks, like, are we already past the point where the entire program has changed? And my second part of the question is because of the changing circumstances in the air and the size, standards and all that, what would be your advice of a few things to shore up a small business in the federal government sector right now, to say this is really what we need to be paying attention to.
I feel like what I need to do as a business owner is to be heading into and to have partners and to find large partners and small partners and find a bunch of people that I could work with in a changing and constantly changing environment is what we’re providing. Are there other things that you’re could think of that we could in this room could take away and that was a good idea.
Sam: On the 8(a) and the 2028 question? I was in SBA when the White House was really pushing the use of 8(a) and raising small disadvantaged business goals. If the administration does change in 2028. First of all, I don’t think this administration is trying to get rid of the 8(a) program there. Opening it up now to other socially disadvantaged individuals, and the money is continuing to flow, particularly to entity-owned firms. So I think it’s still worth it even under this administration. If you don’t think the party is going to change in the White House in 2028, to still apply to the 8(a) program, there’s still a lot of money there.
Even if it goes down $5 billion, that’s still $20 billion that goes through the program. There is a difference in how much is going through sole source versus competitive. That’s an emphasis on competition. So it may be a different type of firm that gets the awards. But I think there’s still a lot of value to the 8(a) program. Whether or not you’re looking forward to whatever the next election results are going to be. That said, they’re usually is a change in emphasis from administration to administration. So I’ve been at SBA when the HUBZone program was the emphasis. I’ve been there when the women-owned program was the emphasis and the 8(a) program.
And now it seems like veteran-owned businesses are getting more credit on the scorecard and more analysis in market research. So what a business can do, number one, is look at those other certifications. At some point there, if you start trying to see if you can qualify for the HUBZone program, that should be open. That’s open regardless of ownership. And there’s just been research that came out and said, yes, it really works. It really does create jobs. When a company gets a HUBZone contract, that program is beneficial and it will have his day as well. And then, as you mentioned, continuing to work on partnerships and not just the Mentor-Protégé joint-venture program, but now with OASIS+.
You not only have the opportunity to get open season on Federal Supply Schedule, but OASIS+ as well, and that is available to engineering companies. Unlike some of the IT vehicles. And the administration is trying to push through the FAR overhaul and the executive orders consolidated buying, and a lot of that consolidated buying is going to go through the supply schedule and OASIS+.
Matt: Those are great points. And I think when it comes to the 8(a) program, I would say absolutely the 8(a) program is still worth it. And is the pendulum going to swing back, so to speak, where it’s gone one way and maybe with the next administration, I think it can, probably to a certain extent. But I think again, a lot of that’s probably going to depend on small businesses themselves. I think there’s more chance of that happening if, again, representatives understand what is happening under the—most members of Congress have no idea what the 8(a) program is and how it operates and all of that type of stuff. But if they know that again, it matters to their district.
And here’s why it matters to you as the business owner. And here’s what the recent changes are that you think have been problematic for that. Absolutely. I think that that’s something that they need to know. The thing I worry about is the more time that goes by from the changes of the 8(a) regs, kind of the more it just becomes, oh, this is the world we’re dealing with now. And I’ll adapt to the program. And it just kind of gets put on the wayside now. Now we’re thinking about our small business size standards and not necessarily the 8(a) program. And so I think it’s all part of the same narrative where here’s why these programs matter and here’s what needs to happen in order for it to be easier for us to participate in them.
As far as what I think businesses can be doing now to kind of deal with this new normal, as you mentioned, it’s constant change. I think the only thing that all of this uncertainty is good for is, quite frankly, small-business government-contracts attorneys where, the more the rules change, the more we’re needed. And for a lot of small businesses, that’s not cool. You just want to work for the government and do a good job and get paid. I would say that as things continue to adapt, the businesses that we see struggle, the businesses that try to be everything to everyone. I’m not a business development expert by any stretch of the imagination, but I would think that dealing with this change would have to do with or a good part of it would be understanding what you do and do it really well and make yourself invaluable not only to the government but to other contractors in this space as a potential partner for them.
Sam mentioned the Mentor-Protégé program. I continue to think that that’s a valuable program. Now, if the rules go through the size standard rules go through, I think that is going to have a tremendous impact to the mentor-protégé program. Probably not a great impact if I’m betting right.
Sam: Because mentors that are currently large would become small under these very high size standards, and they would have no reason to stay in the mentor—
Matt: It’s going to remove the incentive for a lot of these businesses.
Sam: And you see the same effect on subcontracting plans as well. Companies that might have subcontracting plans could become small, and then they wouldn’t need a subcontract plan. So that would cut out a lot of small business subcontractors.
Audience Questions: OTAs, GSA Schedules, and Fraud Investigations
Audience: Okay. We have a couple of questions that I saw. Hands up. And I know that Sam and Matt will both be available after the meeting for about ten minutes. Just so you guys know. More dialog and questions, but I’m really interested here since we have two attorneys for free. So this should be awesome. In 2026, small businesses has pivoted every small businesses pivoted probably 6 or 7 times. And on executive orders, data calls, whatever that size standard impacts to OTA program, lack of sole source to competitive, and then funding the allocations, contracts, going away or not awarded, paused, carryover. Here’s the point: impact to the OTA construction threshold for small business.
Any project over 7.5 million will be required to be able to win the GSA, or the new size standards have impact on how they’re currently drafting the OTAs. And then the next, which I think is relevant for a lot of service companies in the small business world. GSA investigations into GSA MAS holders: 690 companies under investigation? What is the impact of that? I can tell you directly for us, get into GSA schedule has just gotten, I’ll say, ten times harder, and that’s not an exaggeration. Does that give you enough basis for the conversation?
Sam: The OTAs? I just want to put a plug in for GovCon Intelligence. We will have an episode on OTAs coming up, and maybe they’re not as great as you think.
Matt: My question when it comes to OTAs and this is in, in particularly in this context, is what in the world are we using OTAs on construction contracts for? My understanding of OTAs is they’re really supposed to be used in the instance of something innovative or quick or something that doesn’t easily fit in the box of existing federal government contracting. So why are we—that’s just—I mean, if you could address that on USC or the construction rule. The question about GSA schedules is a very, very interesting question because I again, Sam made this point earlier. I think a lot of what the administration is doing is aimed at the fraud and abuse.
Now, fraud and abuse in government contracting is far too often the tail that wags the dog. I think my position is not as your lawyer, but if a government contractor gets something wrong, it’s not always fraud. Sometimes people just get stuff wrong. And I think from the government’s standpoint, when all you have is a hammer, everything looks like a nail. If the government or if a contractor does something wrong, I think far too often they jump to the F word as the reason or the rationale for that. So, it’s this tension where we’ve been telling people, especially under President Trump’s executive order, trying to move more procurements through GSA, which again, I think probably makes a lot of sense.
We’ve been telling people, if you can get on the schedule, if you can get any of these GSA IDIQ contracts, you’re going to want to do that. But then now on the back end, they seem to be making it much more difficult for people to do that. Again, it’s not a bad thing if what they’re doing is trying to make sure that companies that shouldn’t have these awards don’t have them. But it’s certainly part of the calculus for small businesses.
Sam: It’s part of the cost of doing business. You have to put up with audits and IG investigations and the specter of fraud. From my experience, fraud in government contracting is very low. But there are these big cases that come out the Wedtech case from the ‘70s and ‘80s going all the way up to the White House. And of course, there’s talk about corruption and government contracting outside of the small business program. So you just have to deal with it. As a small business contractor, you have to know the rules. Limitations on subcontracting mentor-protégé 40%. There’s a lot of rules to keep track of and they keep changing. But that’s why we’re here.
Audience Question: SDVOSB Certification at SBA
Audience: John Avolio Design Build Consortium, and we are an SDVOSB. I know you were talking about 8(a) and HUBZones, but right now the hub of the services business is really comparable to the 8(a). You may not think so, but you have to look over at the VA. So right now my concern is yes, the SDVOSB program is alive and well, but it made a change. And the VA was originally certifying the SDVOSB, now it’s over to the SBA. There’s not a whole lot of information out there. Are we going to start seeing this information that services have that since 2013? The program has changed, but it really hasn’t been any adequate information or update.
Sam: That’s a really good point. And I can give you the inside view on why that is particularly these days. It used to be, especially when the veterans certification program came over to SBA, that there was a separate dedicated office for veteran certification, a separate office for HUBZone, a separate office for 8(a) and women-owned. A few years ago SBA combined all of those programs into one certification office. This happened the same time when SBA introduced its new website, MySBA Certifications. So this is part of an effort to do more with less. And of course, it’s accelerated under DOGE and workforce cuts under this administration.
But what the applications keep coming through the 8(a) applications, women-owned, HUBZone applications keep coming through. What falls to the wayside is this education part that you’re talking about information about how to get there. Now, there is some good information online. If you go to the MySBA Certifications website, they have a really good FAQ that I think the contractors that work on that site keep up to date. So I would look at MySBA Certifications, but also go to your APEX Accelerator. That’s a free resource. You’re paying for it out of your tax dollars. And they have courses. They have one on one counseling that you can use to try to find out more information about the certification. And once you’re certified, how to stay certified.
Matt: I always tell people you’re going to want to start with APEX. It’s a free resource. And it’s—that’s why they’re there is to provide this—a lot of this kind of information at the outset to people. And then, as questions become more advanced or if you’re an SDVOSB company and you’ve got two owners and you need an operating agreement and all of that type of stuff, well, okay, maybe it’s time to get a government contracts attorney involved, somebody that understands the nuance of those rules and what a non-veteran owner and a company can do or can have a say over versus what they can’t. I do think that it is overall has been a very good, very positive thing that these rules are now consolidated under the SBA.
I think when there was two regimes before VA and SBA, it was just too confusing to people. And of course, we saw instances where somebody may be eligible under one set of regulations and how they interpret them versus the other set of regulations and how those are interpreted. And so I do think overall, the consolidation has been much better and much more helpful to spot.
Closing
Sam: Well, thank you so much to the SAME Small Business Conference. Thank you, Matt, and thanks to everybody at home.
Matt: Thank you.
With over 20 years of Federal legal experience, Sam Le counsels small businesses through government contracting matters, including bid protests, contract compliance, small business certifications, and procurement disputes. Sam received his law degree from the University of Virginia and formerly served as SBA’s director of procurement policy. His website is www.samlelaw.com.
This video is for informational purposes only and does not constitute legal advice.
