Uncertainty looms over procurement parity dispute
For the past several months, Small Business Administration officials have lobbied lawmakers to support legislation that would place contractors in the 8(a) and service-disabled veteran-owned small business programs on equal footing with companies located in Historically Underutilized Business Zones. The 8(a) designation refers to businesses owned by socially or economically disadvantaged individuals; HUBZone firms are located in low-income neighborhoods.
The three programs were thrown into a state of uncertainty after the Government Accountability Office ruled in May 2009 that HUBZone firms are legally at the top of the small business pecking order. The Office of Management and Budget and Justice Department disagree with that decision and have directed agencies to disregard it.
The result is contracting officers don't know how to proceed, said Joe Jordan, associate administrator of SBA's Office of Government Contracting and Business Development.
The Air Force recently followed OMB's directive, telling GAO that it was ignoring its ruling in a second HUBZone protest case filed by DGR Associates Inc. "Contracting officers are not to provide a priority to HUBZones," Air Force officials told agency attorneys, according to correspondence Government Executive obtained.
GAO, meanwhile, essentially has wiped its hands of the dispute, stating it would no longer waste time and resources resolving similar HUBZone protests. "We will decide future protests raising the issue here in an expedited and summary manner, in the interest of reducing the costs associated with filing and pursuing such protests," wrote Lynn Gibson, GAO's acting general counsel in the DGR protest decision.
While legislation remains in doubt, the dispute does appear to be reaching a judicial conclusion. The U.S. Court of Appeals for the Federal Circuit will soon hear Justice's appeal of the Mission Critical Systems case. And, unlike the Court of Federal Claims, the Appeals Court ruling has precedential effect, meaning its decision would apply to future HUBZone priority cases.
SEE PRIOR POST:
US Court of Claims rules HUBZone preference trumps Section 8(a) preference
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