Below is auto-generated summary of my live recording from the SAME Mid-Atlantic Small Business conference in Virginia Beach. If you check back on the website in a few days, I plan to publish a fuller transcript.
Here’s the link to the OIRA notice about SBA’s proposed rule on “Fraud, Waste and Abuse Reforms”: https://www.reginfo.gov/public/do/eoDetails?rrid=1287014
In this episode of GovCon Intelligence, Sam Le discusses the imminent release of the Small Business Administration’s “Fraud, Waste, and Abuse Reforms” proposed rule. The conversation opens live from the convention floor at the SAME Mid-Atlantic Conference in Virginia Beach, where Sam reveals that the SBA submitted the economically significant rule to the Office of Information and Regulatory Affairs (OIRA) on February 20th.
Sam details what government contractors should expect in the proposed rule, predicting new reporting mandates for limitations on subcontracting and heightened scrutiny on joint ventures and mentor-protege arrangements. He notes that agencies are already beginning to closely examine joint venture compliance with the 40% rule. Additionally, the rule might target the 8(a) program’s economic disadvantage thresholds—specifically the $6.5 million total asset limit, which Sam points out is particularly burdensome for growing companies that require bonding.
Drawing on recent events, Sam expresses deep concern over the SBA’s recent wave of 8(a) suspensions, noting that the number of suspended companies recently dipped back into the 800s after temporarily spiking to 1,000. He argues that the SBA is likely using AI and algorithms to review economic disadvantage financial documents, leading to automated errors where exclusions are not properly applied by the computer. Because he believes most of these companies have done nothing wrong and have already been cleared by a human being previously, Sam states he is unwilling to publish the suspension list.
The episode also addresses the practical impacts of the recent FAR overhaul. Sam highlights the current regulatory conflict between 13 CFR and the new FAR rules, specifically regarding the “once 8(a), always 8(a)” automatic release policy and recertification requirements. He warns that with a shrinking cadre of experienced contracting officers and the new discretionary authorities introduced by the FAR overhaul, contractors may see unpredictable new procurement strategies in solicitations. Sam concludes by urging companies and trade associations to prepare hard data to submit to regulations.gov during the upcoming public comment period, emphasizing the importance of highlighting the rule’s economic impact on small entities under the Regulatory Flexibility Act.
With 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 obtained 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.
