Attorneys for the Small BusinessAdministration are headed to court in October hoping to dismiss a suit brought by the Petaluma, Calif.,-based AmericanSmall Business League, which claims the agency's reports on achievement ofsmall-business contracting goals are legally suspect and harmful.

The league's complaint, filed in Mayagainst Administrator Maria Contreras-Sweet in federal District Courtin San Francisco, charges that the SBA's "illegal policies" have "defraudedsmall businesses and small businesses owned by women, minorities and disabledveterans out of hundreds of billions of dollars in government contracts,"the league said.

Specifically, it argues that the SBA shouldnot be able to exclude certain contracts when calculating whether agencies meetthe 23 percent goal in small business contracting. Thoseexclusions include contracts performed outside of the United States,acquisitions by agencies on behalf of foreign governments, or all contractsinvolving more than two dozen agencies on a list that ranges from the FederalDeposit Insurance Corp. to the Transportation Security Administration.

Such exclusions in measuring the percentageof prime contracts awarded to small businesses is "arbitrary, contrary to theclear directive of the Small Business Act, and thus exceeds the SBA'sauthority," the league's attorney argued. He noted the statute's requirementthat the SBA monitor agencies that fail to meet small business contractinggoals so they execute a remediation plan. Yet "through creative accounting . .. failed goals are not reported, no analysis is done, no remediation plans arecreated, and Congress' clear directive that the SBA continue to monitor andimprove its small business participation programs is left unheeded," the briefsaid.

Late last month, just before the filingdeadline, the SBA responded with a motion to dismiss. "SBA's requirement topublish agency remediation plans stems directly from the Small Business Act.Though the implementation of this requirement is tied to the outcomes publishedin the goaling reports, it is the statute—not thereports—which binds SBA to act," the agency argued. "Moreover, the allegedlegal consequences for plaintiff are speculative and result not from SBA'sactions but from individual contracting decisions across multiple federalagencies."

SBA added that the court lacks the federalsubject-matter jurisdiction, and said the plaintiff alleges no "final agencyaction" that would invoke a waiver of sovereign immunity under the AdministrativeProcedure Act. "The goaling report does not amount toagency action, which must be analogous to 'rule, order, license, sanction,relief, or the equivalent or denial thereof, or failure to act' as defined bythe APA," SBA said. "Even if the goaling reportconstitutes agency action, it is not final agency action because the reportdoes not consummate any SBA decision making process, and because it does notdirectly result in legal consequences for either party."

League president Lloyd Chapman told GovernmentExecutive the SBA's brief "completely side-stepped the two main issuesof the case—their grandfathering rule and their exclusionary rule," to "try andhave the case thrown out on a technicality. Based on their weak response, wefeel we have an excellent chance of prevailing." 

He is seeking an injunction against excludingcertain contractors from the calculation, an amended goalingreport and attorneys' fees.

Separately on Tuesday, the SBA unveileda new website called certify.sba.gov tohelp women-owned and economically disadvantaged contractors navigate theapplication and certification process. It includes a tool that poses 15questions to help firm owners determine their status in qualifying for governmentset-asides.

To view full article, click here: http://www.govexec.com/contracting/2016/08/small-business-administration-defends-methods-documenting-contracting-goals/130600/

The Small Business Administration isasking a judge to throw out a lawsuit claiming it uses "creativeaccounting" for federal contracting benchmarks.

SBA filed a motion to dismiss thelawsuit, which was filed in May by the American Small Business League,related to the agency's annual goaling report.

"SBA's requirement to publish agencyremediation plans stems directly from the Small Business Act," SBA counselstated in court documents. "Though the implementation of this requirement istied to the outcomes published in the goaling reports, it is the statute — notthe reports — which binds SBA to act. Moreover, the alleged legal consequencesfor [ASBL] are speculative and result not from SBA's actions but fromindividual contracting decisions across multiple federal agencies."

ASBL in a statement called the motion adodging of fraudulent policies.

"The SBA has obviously sidestepped therelevant issues of this case because their policies are undeniably in directconflict with the Small Business Act," said Robert Belshaw, an attorney forASBL. "The SBA is trying to deny any legal obligation to give an accuratereport on the true level of small business participation as the statutesrequires."

SBA in March released its annual report card on smallbusiness federal contracting. As a whole, the government received an "A"on its report card for fiscal 2015.

For the first time the governmentreached its 5 percent women-owned small business [WOSB] contracting goal since the bar was setin 1996. The government spent $17.8 billion working with WOSBs, accordingto the report.

The government also passed its 23percent overall small business procurement goal by spending 25.75 percent, or$90.7 billion on small business contracts.

SBA explained in its motion that "eachagency submits a report to the SBA Administrator at the end of each fiscal yearindicating whether the agency achieved its goals, any justifications forfailure, and a remediation plan."

The business league takes issue withwhat it says is the SBA practice of excluding certain contracts in away to "misrepresent and fabricate" compliance with those goals, resulting inFortune 500 companies being awarded small business contracts.

In a May interview with Federal NewsRadio, SBA's associate administrator of Government Contracting and BusinessDevelopment John Shoraka said the agency's exclusion process was both a work inprogress and a holdover from the previous administration.

"When we came in as an administration in2009, we wanted to be able to continue to measure apples to apples to apples,to see if we're actually progressing," Shoraka said. "We kept those exclusionsas they stood when we arrived, to make sure we weren't accused of sort offiddling with the numbers and making it look like we were having success."

A request for comment from SBA was notimmediately returned.

In SBA's motion, the agency makesthree arguments for tossing the lawsuit. One argument isthat the agency's goaling report is not equal to a rule or order.

"The criteria used to determine whichcontracts qualify as small business, and which contracts qualify as goalingexclusions, are already determined by existing laws and policies that governthe SBA and other agencies," court documents state. "Though SBA is alsodirected by statute to publish the information found in the goaling reports,the reports themselves do not 'implement' the law."

Another argument is that the reportingdoes not directly impact legal rights.

"Whatever legal consequences mightaccrue to [ASBL] would be the result of further contracting decisions byother federal agencies, not the goaling reports or agency remediation plans,"the motion states. "The data contained in the goaling reports does not createSBA's responsibility to publish remediation plans, which already exists underthe Small Business Act."

The third argument rests on what SBAsays is a lack of "final agency action," which ASBL needs to be able to file alawsuit under the American Procedure Act.

"The APA permits suit against an agencywhen a person has suffered a 'legal wrong because of agency action' or has been'adversely affected or aggrieved by agency action within the meaning of arelevant statute,'" the motion states.

"SBA's reporting of small businesscontracting achievements is not final agency action within the meaning of theAPA, and thus cannot be challenged in federal court. While SBA is required bystatute to report these achievements and agency remediation plans, the reportsthemselves do not affect the law or SBA policy, nor impose direct, legalconsequences for either party."

A hearing on the motion is scheduled forSept. 29.

To view full article, click here: http://federalnewsradio.com/contractsawards/2016/08/sba-fights-back-contracting-goals-lawsuit/