SBA REGULATORY UPDATE NATIONAL 8(a) ASSOCIATION 2014 WINTER CONFERENCE February 11, 2014

Summary of Presentation 2010 Jobs Act and 2013 NDAA Provisions and Implementation To Date Statutory Changes yet to be implemented OHA and GAO Case Law Highlights Other Issues Of Note Enforcement and Oversight Environment/Trends

Implementation of the 2010 Small Business and Jobs Act and 2013 NDAA Continues June 28, 2013 SBA issued a final rule implementing key integrity provisions of the Jobs Act. –Key provisions include 13 CFR October 2, 2013, SBA issued new, final rule on Multiple Award Contracts. Many NAICS Codes have been revised per Jobs Act requirement to revisit every five years.

Pending Changes: Required by the Jobs Act/NDAA, but not yet released Limitation on Subcontracting/"Similarly Situated Entities“ –Law requires SBA to change to a “price-based” model –“Similarly situated entities” count toward the prime’s requirements, – BUT… What about the ostensible subcontractor rule? Extending SBA's Mentor-Protégé Program beyond 8(a) Safe Harbor Provision: PTACs and SBDCs –Will this ever come to pass?

OHA and GAO case law OHA: Red RiverRe-sellers and the "ostensible subcontractor" rule (Services); Compare to Iron Sword (Construction) GAO:HRCI-MPSC PASS, LLCWhat constitutes a "new" procurement for purposes of the 8(a) programs?

Other Issues Mentor protégé agreements and affiliation: –13 CFR (d)(4): “No determination of affiliation or control may be found between a protege firm and its mentor based on the mentor/protege agreement or any assistance provided pursuant to the agreement.” Limitation on Subcontracting: –Will the new rule impact existing contracts or require contractors to change their approach? –Will the answer differ if the contract is IDIQ? What about long-term contracts? –Will contractors have the option to change their approach?

Regulatory/Enforcement Environment SBA OIG and Related Enforcement Activity Has Increased….

Indictments from OIG Cases Convictions from OIG Cases Suspensions / Debarments Recommended to the SBA SBA Proposed Debarments SBA Final Debarments FY FY FY FY

Regulatory/Enforcement Environment SBA OIG Statistics Show a Clear Increase in Enforcement Limited Resources -- both for Rule-makings and Enforcement Impact on Day-to-Day SBA activity

Other Questions… When the new limitation on subcontracting requirements are imposed, will the calculation change with respect to existing contracts? Mentor Protégé: (4) No determination of affiliation or control may be found between a protege firm and its mentor based on the mentor/protege agreement or any assistance provided pursuant to the agreement (d)(4):

OHA and GAO case law OHA: Red River –Re-sellers and the "ostensible subcontractor" rule (Services); –But compare to Iron Sword (Construction) GAO: –HRCI-MPSC PASS, LLCWhat constitutes a "new" procurement for purposes of the 8(a) programs?

Thank You! Bob Tompkins, Partner, Holland & Knight Christine Williams, Partner, Perkins Coie John Klein, Associate General Council for Procurement Law, SBA Christine Williams, Partner, Perkins Coie Jon DeVore, Partner, Birch Horton Bittner & Cherot