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The Three Most Important Bid Protest Decisions of 2018Bradley attorneys Aron Beezley, Patrick Quigley, and Sarah Osborne  recently published a Law360 “Expert Analysis” article on the three most important bid protest decisions of 2018: Dell Federal Systems, L.P. v. United States, 906 F.3d 982 (Fed. Cir. 2018); PDS Consultants, Inc. v. United States, 907 F.3d 1345 (Fed. Cir. 2018); and Oracle America, Inc., B-416061, 2018 CPD ¶ 180 (Comp. Gen. May 31, 2018). The article—which is available on the Law360 website—provides an overview of these three cases, and provides insights on how they will shape the bid protest landscape going forward.

If you have any questions about the topics discussed in the article, please feel free to contact Aron Beezley, Patrick Quigley, or Sarah Osborne.

Small Business Runway Extension Act Proving to Be a Double-Edged SwordWe recently reported that, on December 17, 2018, President Trump signed into law a bill that amends the Small Business Act to require that the size of a federal contractor be measured by an average of five years—rather than three years—of revenue for the purpose of determining small business program eligibility. Almost immediately after the bill became law, we started hearing from federal contractors—most of them ecstatic about the new law, but some of them less-than-thrilled.

Why are most federal contractors ecstatic about the new law?

Those in the former group generally are ecstatic because this new law may help them keep their small business status for a longer period of time, and thus keep open a lucrative line of business reserved for small companies.

For example, a company operating under NAICS code 236210 (Industrial Building Construction)—which has a size threshold of $36.5 million—with the following revenue from the preceding five years will qualify as a small business under the new law (whereas, they would not have qualified under the old law):

FISCAL YEAR 2014 2015 2016 2017 2018
REVENUE $25 million $30 million $35 million $37 million $40 million

 

In other words, this hypothetical company would have an average annual revenue under the old, three-year rule of $37.3 million—which would make them other-than-small—but would have an average annual revenue under the new five-year rule of $33.4 million—qualifying them as a small business.

Why are some federal contractors less than thrilled with the new law?

Those in the latter group generally are not thrilled because this new law will actually have the effect of making them other-than-small, and thus will close a lucrative line of business reserved for small companies.

For instance, a company operating under NAICS code 236210 (Industrial Building Construction)—which, again, has a size threshold of $36.5 million—with the following revenue from the preceding five years will not qualify as a small business under the new law (whereas, they would have qualified under the old law):

FISCAL YEAR 2014 2015 2016 2017 2018
REVENUE $47 million $45 million $40 million $35 million $25 million

 

In other words, this hypothetical company would have an average annual revenue under the old three-year rule of $33.3 million—which would make them small—but would have an average annual revenue under the new, five-year rule of $38.4 million—which would make them other-than-small.

Is this new law tenable?

In short, the new law may not be tenable in its current form. The new law clearly is well-intended and will be a significant benefit to many federal contractors, but based on the responses from federal contractors that we have seen thus far, it appears likely that there will be a push by some in the industry to make the lookback period the lower of either the three-year average or the five-year average.

Wait, I have more questions!

If you have any questions about how the new law may impact your business, please do not hesitate to contact Aron Beezley.

Size Determination Measurement Period Changed from Three Years to Five YearsOn December 17, 2018, President Trump signed into law a bill that amends the Small Business Act to require that the size of a federal contractor be measured by an average of five years, rather than three years, of revenue for the purpose of determining small business program eligibility.

The bill—known as the Small Business Runway Extension Act of 2018 (H.R. 6330)—“is designed to reduce the impact of rapid-growth years which result in spikes in revenue that may prematurely eject a small business out of their size standard.” The bill also aims to “allow small businesses at every level more time to grow and develop their competitiveness and infrastructure, before entering the open marketplace.”

The bill is effective immediately, and the Small Business Administration presumably will update its regulations accordingly in the near future.

If you have any questions about how the Small Business Runway Extension Act of 2018 may impact your company, please do not hesitate to contact Aron Beezley.