2205, 2019

Legislative Update – Bills to Watch for Small Business Federal Government Contractors

May 22nd, 2019|

Written by:  Jonathan Cannon, Carissa Siebeneck Anderson, and Jon M. DeVore

This year, the 116th Congress has begun to take action on a number of issues relating to small businesses and government contracting. This post highlights some key areas that we are following at Birch Horton. These are: Expanding Contracting Opportunities for Small Business Act of 2019, The 809 Panel Report, and the Clarifying the Small Business Runway Extension Act.

The Expanding Contracting Opportunities for Small Business Act of 2019

Legislative Status. On January 17, 2019, the House passed the Expanding Contracting Opportunities for Small Business Act of 2019 (H.R. 190). This legislation passed with near unanimous bi-partisan support with a 415/6 vote count.[1]  The Bill has been referred to as the Senate Small Business and Entrepreneurship Committee, but they have yet to move on the proposed legislation.

Increase Caps for Certain Sole Source Awards. This Bill intends to help small disadvantaged businesses—HUBZones, Service-Disabled Veteran-Owned Small Businesses (SDVOSBs), women-owned small businesses (WOSBs), and economically disadvantaged women-owned small businesses (EDWOSBs)—obtain sole-source contracts. The legislation increases the dollar amount of sole-sourced contracts that can be awarded. Anticipated awards could now be up to $7 million for manufacturing procurements (replacing the current $5m limit, and $6.5m for qualifying women-owned businesses), and up to $4 million for other contract opportunities (replacing the $3m sole source cap for HUBZone or SDVOSB, and $4m for women-owned businesses). While the 8(a) sole source caps were not raised in the original Bill in the House, we understand that versions of the Senate bill do include similar provisions applicable to the 8(a) Program.

Option Years Would Be Excluded from Calculations. Perhaps the most significant proposed change is that new sole source maximums would no longer include option years. Instead, maximums apply only to the first contract year effectively doubling, tripling, or more, the maximum allowable sole source awards. There has been some confusion about the impact on 8(a) regulations, but the House bill does also remove option years from the 8(a) sole source cap calculation as well.[2]

This proposal has been met with mixed reviews by some in the SBA 8(a) Program because the change will likely increase competition for larger contracts that have been previously unavailable to individually-owned small businesses. The change will also potentially increase the size and overall number of sole source contracts, which could be good for all eligible businesses, including firms owned by Tribes, Alaska Native Corporations (ANCs) and Native Hawaiian Organization (NHO) owned firms.

Other Actions. Additionally, this new legislation mentions the need for the SBA Administrator to notify the respective legislative committees when it has established programs that certify small business owned and controlled by women and service-disabled veterans. Currently, contracting officers must obtain SBA verification of eligibility before awarding contracts. It is worth noting that SBA issued a recent proposed rule to create the statutorily-mandated WOSB/EDWOSB certification programs.[3] SBA has testified to Congress that the new certification program will likely not be fully implemented until January, 2021. The bill also requests a GAO report regarding WOSBs and SDVOSBCs.

Clarifying the Small Business Runway Extension Act

Legislative Status. Introduced in the House. On May 1, 2019 The House Small Business Committee approved by voice the “Clarifying the Small Business Runway Extension Act” (H.R. 2345).

Purpose. The “Clarifying the Small Business Runway Extension Act” requires the Administrator of the SBA to issue a final rule to implement the Small Business Runway Extension Act no later than December 17, 2019. This bill would ensure that the previously passed Runway Extension act would apply to and include the SBA, which was unclear from the original legislation. Passage of this bill would require the SBA to implement a transition plan within 90 days of enactment.

The original “Small Business Runway Extension Act” (H.R. 6330 115th Congress) changed the small business size calculation to a five-year average (replacing the three-year average that existed before the legislation passed). SBA responded to the legislation stating that it did not change the size calculation in the statute (as was likely intended by Congress), but SBA agreed to take the necessary steps to implement a similar five-year average into its regulations regarding size standards. This perceived legislative drafting error caused significant confusion.

Impact. Moving to a five-year average will have a significant impact on the number of eligible small businesses, which are based on either the number of employees or on gross receipts. The small business size thresholds determine eligibility for SBA resources, programs, and assistance including small business federal contracting opportunities. Supporters argued that the problem with the three-year period is that one strong year in such a small window could lead to a business being prematurely eliminated from the program. Extending the average to include five years should even out a company’s high and low years, to get a better long-term picture of small business size despite one booming contract year. The five-year average will also extend the time a growing business could remain a small business, as growth years will be averaged over previous smaller years.

The 809 Panel Results

In the 2016 NDAA (Public Law 114-92), Congress created in section 809 a panel with the purpose of “streamlining acquisition regulations.” The panel was responsible for reviewing acquisition regulations to streamline and improve the efficiency of the defense acquisitions process.

The results of this report were recently published was over 1000 pages of research with 98 recommendations of ways to streamline and improve the acquisition system. Of the recommendations, there were two points that were potentially alarming for small business contractors. These were Recommendations 75 and 80. Recommendation 75 addresses revising regulations, instructions or directives to eliminate non-value added documents or approvals that could allow the release of contract opportunities from 8(a) programs if the SBA failed to respond in 15 days. (Currently, SBA must approve an agency’s request to take a procurement opportunity out of the 8(a) Program.) Recommendation 80 dealt with preservation of preference for procuring commercial products and services for small business set-asides. Recent Office of Management and Budget directives regarding some of the recommendations indicates that the rule of “once an 8(a) contract, it shall stay an 8(a) contract” will not likely change.

Fortunately, it does not look like the Senate will adopt any of the panel’s recommendations into the report in the 2020 NDAA. While this may not be an immediate concern, it is worth noting that discussion has begun regarding a number of these issues.


[1]  This is notable since only 6% of bills introduced in the last Congress even got a vote, while half of the bills that did receive a vote became law.

[2] The confusion among commentators likely resulted from the inconsistent way in which the House legislation was written.  The sole source provisions regarding WOSB, HUBZone, and SDVOSBC were overtly replaced in the Bill, while “including options” language was stricken from Section 8 of the Small Business Act in one sentence in Sec. 2(d) of the House Bill in one sentence.

[3] See Women-Owned Small Business and Economically Disadvantaged Women-Owned Small Business-Certification (May 14, 2019), available at  Comments on this proposed rule are due July 15, 2019.

1705, 2019

Ally Law Celebrates Its 30th Anniversary

May 17th, 2019|

Written by  David Karl Gross

Ally Law is proud to celebrate its 30th anniversary in 2019. Ally Law is a global network of law firms that allows its member law firms to fully serve their clients in today’s expanding global economy.  Many of these firms have worked together for years and have established close knit relationships.  BHBC is proud to be the Ally Law representative for Alaska.  As an Ally Law member, we can use our global contacts within Ally’s network to provide our clients with assistance when they need legal help in another country or region.  Even if our clients do not have an international problem, having Ally Law partners in the Lower 48 gives us the ability to team-up with outside firms to deal with issues in other jurisdictions.   These long-standing relationships allow us to serve  our clients’ needs, and avoid the  aggravation and uncertainty of locating competent out-of-state or international counsel.

It is not enough to understand the law in a theoretical way.  To be effective, excellent legal skills must be balanced by practical business sense and knowledge about the sectors in which our clients operate. The firms of Ally Law — individually and together — pursue opportunities to enhance their knowledge of your industry. BHBC and our Ally Law partners have significant experience in the healthcare, energy, technology, retail, real estate, and leisure sectors and are noted for our skills in labor and employment, mergers and acquisitions and business litigation.  Our collaborative approach to the law enhances our ability to fully serve our clients.

The motto of Ally Law is: “We get it.  We get it done,” which captures the spirit of Ally’s global network.  BHBC, and all of the firms belonging to Ally Law, share the goal of working hard to understand our clients’ needs and what should be done to solve the issues they  face.  BHBC’s participation in Ally Law expands our reach and increases our ability to offer greater assistance to our clients.  If you are faced with a problem or issue outside of Alaska or the United States, please call BHBC.  We will use our connections within Ally Law to provide you with the resources you need in an economical and effective manner.

There is a reason why Ally Law has been in existence for 30 years and has grown significantly over that period of time.  It allows local firms to have an intra-jurisdictional and international reach that they would otherwise not enjoy.  BHBC is proud to be a part of Ally Law and is happy to celebrate its 30th anniversary with our member partners.

105, 2019

Native Hawaiian Organizations Association Sponsors the 2019 Business Summit Conference

May 1st, 2019|

Written by:  Jon M. DeVore

The Native Hawaiian Organizations Association (NHOA) is sponsoring the 2019 Business Summit Conference on May 21-23, 2019, at the Prince Waikiki Hotel in Honolulu, Hawaii. The NHOA conference will focus on legislative, legal and business issues relevant to small businesses, including SBA 8(a) participants and small businesses owned by veterans, disabled veterans, and women engaged in the federal contracting industry. There are currently 66 Native Hawaiian Organizations that are 8(a) participants and joint ventures identified in the U.S. Small Business Administration (SBA) Profile that have offices and do business throughout the United States.

Jon DeVore, a shareholder in Birch Horton Bittner & Cherot’s Washington, D.C. office, will join other legal specialists and experts on a panel on May 23rd to discuss the Section 809 Panel’s recommendations related to federal procurement and specifically about how those recommendations might impact small business procurements. The Section 809 Panel was created by the U.S. Congress in a recent National Defense Authorization Act with the mission of reviewing and making recommendations on how federal procurement could be changed to be more efficient and cost effective. Subsequently, the Section 809 Panel has written three volumes of reports with sweeping proposals for change, including a recommendation that Congress eliminate most small business set-asides for Department of Defense acquisitions and replace the longstanding set-aside system with a meager five percent small business price preference. 

Among those attending the Conference may be government representatives, large businesses, and representatives of Alaska Native Corporation and Tribe small business companies. Participants will gain valuable insights and hear about real life experiences of working with the federal government and other businesses engaged in similar services.  The Conference provides a great opportunity to network with other people, businesses, contracting officers, government representatives and elected representatives in the local, State and Federal governments.

2802, 2019

Update: The Intersection Between Free Speech and Defamation

February 28th, 2019|

Written by David Karl Gross

Several months ago, I wrote an article providing guidance to bloggers about the dangers of being sued for defamation.  I explained that defamation is an important legal remedy because it provides people with significant recourse when the words of another have caused harm to their careers, reputations or finances.  I pointed out, however, that it was very difficult to win a defamation lawsuit against a blogger who makes statements about a public figure due to the United State Supreme Court’s decision in New York Times v. Sullivan, 376 U.S. 254 (1964).  The court in that decision held that for a public figure to prevail in a defamation lawsuit, they must prove actual malice, meaning that the blogger either knew the statement was false or acted with reckless disregard for the truth.  With that, the chances that a blogger would be held liable for defamation due to comments directed toward a public figure are remote, which gives bloggers wide latitude to write what they want.

This concept was reaffirmed in a recent decision from the First Circuit.  The factual background of that case was as follows:  Katherine McKee (“McKee”) accused comedian Bill Cosby (“Cosby”) of forcibly raping her in 1974.  She did not immediately report the attack for fear that Cosby would retaliate by ruining her career.  However, in 2014, when more than 20 other women had accused Cosby of sexual misconduct, McKee gave an interview with the New York Daily News discussing the attack.  When the interview was published, a lawyer for Cosby sent the Daily News a letter stating that the claim of rape was not supported because of prior statements McKee had made about her relationship with Cosby.  Quotes from the lawyer’s letter were published by other media outlets.

In response to the publication of the lawyer’s letter, McKee filed a lawsuit against Cosby for defamation, asserting that the statements made by the lawyer were defamatory.  However, the Federal District Court dismissed the case, largely on the grounds that McKee was a public figure and pursuant to the United States Supreme Court’s decision in New York Times v. Sullivan, there would have to be a showing of actual malice, which the court found did not exist.  The decision was appealed to the Court of Appeals for the First Circuit, which affirmed the lower court’s decision.  The case was then appealed to the United States Supreme Court.

The United States Supreme Court declined to hear the petition for writ of certiorari, which means that the Circuit Court’s decision was affirmed, but Justice Clarence Thomas took the opportunity to express the opinion that it is time to take a closer look at the legal conclusions made in New York Times v. Sullivan.  Justice Thomas stated that the Court’s decision in New York Times v. Sullivan, and the cases that were decided thereafter, amounted to “policy-driven decisions masquerading as constitutional law.”  In explaining what he meant by this, Justice Thomas traced the history of the common law in relation to the tort of defamation.  He demonstrated that pursuant to the common law in order to win a claim of defamation “a defamed individual need only prove ‘a false written publication that subjected him to hatred, contempt, or ridicule.’” Justice Thomas went on to point out that it was actually easier to win a defamation case at common law if the defamatory remarks were directed toward a public figure because the law was designed to protect the “best citizens” from these types of attacks.  In the end, Justice Thomas opined that each state should be in charge of defining the scope of the law of defamation and that the common law of defamation should not be “constitutionalized” by using the First Amendment law as a means to determine if a statement was, in fact, defamatory.

At the end of the day, Justice Thomas’ concurring opinion has no precedential value and New York Times v. Sullivan remains the law of the land.  What it does suggest, however, is that jurists, including judges at the highest level, are open to the idea of reinstating the common law of defamation.  If this were to happen, there would be a herculean shift, such that public figures would be able to file lawsuits each time someone published a defamatory statement about them.  This would subject bloggers, as well as the media at large, to lawsuits each time it published something that was false.  The impact of such a change could have an even greater impact if people could be held liable for defamatory statements made on social media platforms, such as Facebook, Twitter and Instagram.

This may promote accountability for what people write.  However, on the other hand, it could have a chilling effect on providing the public with important information.  And again, while it has no precedential impact, Justice Thomas’ comments will certainly have a ripple effect in the lower courts.  Close attention will have to be paid to defamation court cases in the years to come.  Those courts addressing this issue will have to determine whether to strengthen or weaken our First Amendment protections.

2102, 2019

What To Do If You Are Involved In A Car Accident

February 21st, 2019|

Written by David Karl Gross

The National Highway Transportation and Safety Administration reports that over 6 million car accidents took place in the United Stated last year, with over 2.5 million involving injuries.  In a recent study, Alaska was listed as one of the most dangerous states for car accidents.  With this, the question is not whether you will be in a car accident, but when.  Considering this reality, it is important to note the following ten things you should do if you are in a car accident:

1.  STOP.  If you made contact with another vehicle or your actions somehow caused an accident, you must stop.  It is a crime if you leave the scene of an accident.

2.  MAKE SURE YOU ARE ALRIGHT.  The first thing you should consider is whether you and your passengers are hurt.  If you are seriously injured, try to stay stationary to prevent additional injury and call 911 immediately in order to obtain medical assistance.  You should also consider the fact that some injuries may not be immediately apparent.  Sometimes shock can mask some of the symptoms of an injury.  If you have any suspicion that you have been injured, consider seeking medical attention.

3.  CALL THE POLICE.  As discussed above, if you are seriously injured, you should call 911 immediately.  In Anchorage, the police do not have to be called if there are no injuries and the property damage is below $500.  However, considering that the property damage in an accident is almost always greater than $500, and considering that sometimes injuries can be masked, it is generally the best policy to call the police.

4.  GET TO SAFETY.  After an accident you should promptly turn on your hazard lights to warn other vehicles.  If your vehicle is operational, pull it to the side of the road.  If not, remain in your vehicle until police arrive.  If your vehicle is in an unsafe location and cannot be moved, carefully exit the vehicle and find a location out of traffic that is safe while you wait for the police.

5.  GATHER INFORMATION.  If you are able to safely move around, you should start to gather information.  Begin by exchanging information with the other driver or drivers.  Make sure to get their driver’s license information, a good telephone number, and an email address.  Also find out the name of their insurance company.  You should also take pictures of the scene and take down the names and contact information of any witnesses.

6.  PROVIDE ACCURATE INFORMATION TO THE POLICE.  When the police arrive, make sure you tell them exactly what happened to the best of your ability.  Do not speculate, guess or misstate any of the facts.  You should not talk about who was at fault and you should certainly not say it was your fault.  Oftentimes fault is a complicated issue dependent on the law; therefore, it is best to let others sort out who is actually at fault.  If you are asked if you are injured and you are not sure, say you are not sure, rather than that you are not injured.  Make sure the officer is aware that you were wearing your seatbelt.

7.  REPORT THE ACCIDENT.  Alaska law requires that you file a crash report with the Department of Motor Vehicles.  You must file this report (Crash Form 12209) if the police were not called or if the police did respond, but instructed you to self-report.  This form must be filed within 10 days of the date of the accident.

8.  NOTIFY YOUR INSURANCE COMPANY.  As soon as possible, provide notice of the accident to your insurance company.  This can be done on the telephone or on-line.  Because most insurance policies have a provision stating that late notice of a claim could result in a denial, it is important to provide prompt notice.

9.  KEEP A FILE.  Keep all of your accident-related documents and information together.  This information should include a claim number, the claims adjuster who is handling the claim, names and telephone numbers of all contacts and witnesses, medical bills and records, receipts for a rental car and other expenses incurred as a result of the accident.

10.  CONTACT A LAWYER.  There are a number of instances when it is best to contact a lawyer to help.  First, if it appears that the injuries you have suffered are permanent or long-lasting, it is best to get the assistance of a lawyer.  Next, if the insurance company denies your claim or is acting in an adversarial nature, such as asking for examinations under oath, it is best to seek out the assistance of a lawyer.  Finally, if you feel like your rights are not being protected, or that the insurance company is not looking out for your best interests, seeking the advice of a lawyer is always a good idea.

If you have been in an accident and have questions or concerns, call Birch Horton Bittner & Cherot at (907) 276-1550.  We will be able to advise you on the best course of action.

1401, 2019

UPDATE: SBA puts on the brakes — SBA will NOT recognize new size calculation requirements (5 year average instead of 3) until new SBA Regs issued

January 14th, 2019|

By Carissa Siebeneck Anderson & Jon DeVore

We recently posted an article (see below) regarding recent legislation impacting how small business size will be calculated.  Congress passed the Small Business Runway Extension Act that changed those calculation requirements—previously, size based on gross receipts (revenue) was calculated based on at least a 3-year average, and the new legislation changed 3 to 5 years.  We hoped that SBA would issue guidance clarifying when and how the changes to the size standards would take effect.

Well, SBA has issued an internal notice, but the distribution of that notice was delayed due to the government shutdown, but it is making its way into the public sphere slowly.  Not everyone will be happy with SBA’s reaction to this legislation – which is basically to put on the brakes.

SBA states:

 “The Small Business Act still requires that new size standard be approved by the Administrator through a rulemaking process.  The Runway Extension Act does not include an effective date, and the amended section 3(a)(2)(C)(ii)(II) does not make a five-year average effective immediately. 

The change made by the Runway Extension Act is not presently effective and is therefore not applicable to present contracts, offers, or bids until implemented through the standard rulemaking process.  The office of Government Contracting and Business Development (GCBD) is drafting revisions to SBA’s regulations and SBA’s forms to implement the Runway Extension Act.  Until SBA changes it regulation, business still must report their receipts based on a three-year average.[1]

While it is a useful step in the right direction that SBA has provided clear guidance (internally), this will not end the confusion.  First, SBA has not issued public guidance, which we hope they will do soon—perhaps in the form of press release or other quick release method once the SBA’s doors are officially open again.  Second, the way that the statute was changed and the lack of an effective date or implementation guidance within the legislation did leave things a bit ambiguous as to legislative intent as to how the size standard would be implemented.  Any line-item change to the requirements in this statute could have caused a similar problem, because of how the statute itself is phrased.  With arguable ambiguity in statutory interpretation comes agency discretion in interpretation.  While reasonable minds could certainly disagree with SBA’s interpretation, the agency will likely enjoy a significant degree of discretion in interpreting statutes applicable to itself, especially as the SBA is charged with implementing the size standards generally throughout the federal government. SBA could also have reasonably interpreted the change to be effective immediately or issued an implementation date.  (See, 15 U.S.C. § 632(a)(2)(C)(ii)(II), which is the Section 3(a)(2)(C)(ii)(II) of the Small Business Act. (Linked below.)) Instead, we will all have to wait for SBA to issue new regulations.  This uncertainty highlights the need for stronger coordination in the future between small business advocates in Congress and the SBA to ensure a smoother implementation.

While it may be somewhat unpopular with some, SBA measured approach does have some merit and potential benefits.  One advantage to this approach, is that SBA will be able to give more guidance as to how and when to implement the change when it does go into effect. 

Potential Legal Challenge?  Others may disagree with SBA’s interpretation of the statute and its effective status.  SBA’s interpretation could be legally challenged in the form of a size protest appeal before OHA or other similar action.  It would be interesting to see whether OHA would agree with the SBA’s interpretation that the statute is not effective immediately, but instead only goes into effect upon completing the formal rulemaking process and obtaining administrator approval.  (These other components are also criteria that must be met under the statute along with the now 5-year average period for size calculation.) 

SBA Recommends Maintaining the Status Quo…So, we would not recommend changing how your business calculates its size just yet (i.e. stick to the 3-year average for now), unless you intend to wage a legal fight to test SBA’s discretion and interpretation.  In the meantime, we must sit and wait for the regulatory process to be completed on SBA’s timeline.  That timeline is uncertain in the best of times, but especially now amidst the ongoing and record-breakingly long government shutdown. 

Get your comments and questions ready.  While SBA has not opened up a formal comment period, business might consider whether they have any questions about how the change should/will impact their business.  Those comments and questions should be collected and submitted to SBA during the mandated comment period that must precede any final regulations in the size standard area.

[1] SBA Information Notice 6000-180022, Small Business Runway Extension Act of 2018, to all GCBD (Office of Government Contracting and Business Development) Employees (Effective 12-21-2018) (emphasis added).

Related Post: Originally posted on January 4, 2019.

Congress has changed how small business size will be calculated.  At the end of the year, both the House and Senate passed the Small Business Runway Extension Act of 2018 (H.R. 6330/S. 3562).  This brief but important piece of legislation was signed into law on December 17, 2018.[1] 

Currently, small business size is calculated based on the average annual receipts (or number of employees depending on the NAICS Code) of the business over the most recently completed three fiscal years.[2]  The new bill expands the average calculation to include the last five years.[3] 

Impact – Longer Small Business Eligibility Period & More Small Business Competition.  This noteworthy change will extend the potential period of small business eligibility.  It will decrease the impact of one uncharacteristically large year.  This change is likely to be a welcome change for small businesses, and potentially even make some former small businesses eligible for small business programs again.  It should be noted that extending the period of eligibility will also likely increase competition for small business contracts, as most small businesses will remain eligible for small business procurements for longer.  Thus, the small business community benefits by getting (potentially) longer periods of small business eligibility, and the government benefits from an increased number of small businesses and thus increased competition for small business contracts.  This should also make it easier and more cost-effective for agencies to reach their small business procurement goals.

Expect A Period of Confusion.  The legislation did not include any timelines for drafting implementing regulations.  There is likely to be a period of confusion while the statute is out-of-sync with the regulations regarding calculation of size.  We would strongly encourage affected businesses to contact SBA to encourage the agency to issue public guidance for small businesses and contracting professionals on how to handle the transition period.  It is clear that as the statute has been updated, it trumps any conflicting regulations.  The SBA will take some time to update its regulations.  However, small businesses that plan to utilize the new formula should be prepared to explain and cite the new law (and its binding legal effect despite conflicting regulations that need to be updated to reflect the revised statute).  Entity-owned businesses may also need to update other business tools and processes, such as tools that track business revenue by specific NAICS Codes for size purposes and to avoid multiple businesses in the same NAICS Codes, which will also become even more critical and potentially confusing.

Please contact Carissa Siebeneck Anderson or Jon DeVore at BHBC if you have any questions about how this new law will affect your business.

[1] Public Law No: 115-324, available at    

[2] See Small Business Act (15 U.S.C. 632(a)(2)(C)(ii)(II); 13 CFR 121.104(c) Period of Measurement.

[3] H.R. 6330: “Section 3(a)(2)(C)(ii)(II) of the Small Business Act (15 U.S.C. 632(a)(2)(C)(ii)(II)) is amended by striking ‘3 years’ and inserting ‘5 years’.”