Comment by jimmygrapes | Hacker News Reader

Comment by jimmygrapes | Hacker News Reader

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Former DoD contract specialist here, Sam.gov is the correct jumping off point for both information on how the process works and for where to find opportunities. The small business set aside is very important, since the regulations require that small businesses be considered to the maximum amount practicable, before larger companies can even be considered (Federal Prison Industries gets first dibs though). Veteran, woman, and minority owned businesses also get higher precedence, and those qualifiers can stack up - a minority woman veteran owned small business is golden, assuming the company can actually bid and perform properly. There are some other areas, such as HUBzone/economically disadvantaged areas that are also considered, but that's better to learn about direct from the information on Sam.gov than from a HN post.

It is a daunting task to register and follow the procedures, and you must be very attentive to detail as a small business owner; however, there are a ton of resources from the Small Business Administration to assist. Don't hesitate to contact them. Be persistent, patient, and proactive.

It used to be much harder than it is today, which is why it might seem to most people that federal contracting is a corrupt good ol' boy network; newcomers simply didn't follow the instructions right, due to complexity and/or confusion. Today though, it's a perfect time to get in the door.

Note that the "minority veteran woman" thing can be gamed a bit (and is) - I know of a few small businesses that are officially owned by the spouse of the actual leader so that they can qualify higher.

So even if your spouse doesn't check all three boxes, having the company officially be owned by your wife can help.

Yep that's almost standard practice by now, so there's lots of competition in that space. And most of the time you (the person researching/drafting/approving the contract) can't really verify it. For me I didn't mind, since it's on them if they committed fraud, not me. Plenty times I would ask to speak to the owner and find out it was "co-owned" with the wife's name on the business license to get woman-owned, and the husband's name (or wife's name, in many cases) to get veteran-owned. Hey, fine with me. Mostly all I wanted was that the work was to spec and delivered on time. If you can game the system without sacrificing legality or quality, go for it!

There is a bit more to the requirement than the company being owned by a woman, namely the requirements for women to be in control of the day to day operations of the business.

It is a similar requirement for veteran owned small businesses and I imagine “gaming” this would be tantamount to fraud.

About as far as I’ve seen be acceptable for “gaming” things is to use a joint venture that is 51% owned/controlled by whatever interest group (e.g., veteran, women, disadvantaged, all of the above, etc.).

Not saying it doesn’t happen, but it’s not a common occurrence from my experience (15+ years active duty, as government employee, and working for a contractor on the actual contract/BD side).

Yeah, see my other comment here, but you make a good point about the definition of "owned" - it can't just be a name, it has to be a legally binding level of control over the operation s and finances. Unfortunately there's not really any standard metric for that which is enforceable.

Claiming a preference can be fraud, and is often abused, but... in reality, nobody's really checking unless there's a justifiable reason to. Not that I'm endorsing such fraud, and you're right, 51% is usually the safe way to go, but many LLC type setups don't have any easy way to help determine that. It's really quite time consuming and intrusive to determine "control" as the person writing or signing the contract. It's very much based on the assumption of honesty, unless there's some clear indication otherwise (and yes, due diligence is performed and documented, at least to some extent - it isn't just a Google search for "companies that sell widgets near me").

For an extreme example, I won't know that a company is a sweatshop using undocumented drug addicted children if their representations and warranties documentation says they don't.

Of course, and you are right on many/most accounts.

However, it is worth mentioning that it is definitely a dangerous game to play, even if the government doesn’t do anything.

Government contracting world is pretty cut throat and all it takes is a competitor, a partner, or an employee catching wind of the foul play and you make your company pretty vulnerable to a few things:

1) extortion for work share (e.g., a partner company threatening to out you to the contracting officer if they don’t give more work share % or some other form of monetary compensation)

2) A competitor contesting the contract award due to the awarded company not meeting the set aside requirements. This can be very costly and lead to the government being forced to look into things more thoroughly. It’s also public record and could seriously damage a company’s reputation in perpetuity.

3) A company employee filing a qui tam suit under the False Claims Act. This can lead to at best, a costly settlement, and at worse, repaying the government even after the work has already been performed.

It’s definitely not a route I recommend taking!

Oh yeah, if someone else catches wind and argues, you're screwed as a contractor unless you can back it all up well. This is the dark side, the crab bucket, which often results in "the big guys" getting the contract in the end.

One simple example is a time I was trying to by doors. Simple doors, no special requirements, just doors, materials and installation, with knobs requiring a keyed access. The chosen provider bid properly, gave their description of key control and associated maintenance ("who has keys and what happens if we lose the keys"). Small business, local, etc. won the award. Competitor had a fit and submitted (after award) significant proof that the winning bidder was falsifying their minority owned status and had changed their business name several times to avoid previous poor past performance marks. TLDR the complainant was right, and eventually won the award.

It doesn't take a lot to get ruined, so please, just be honest. If you aren't, someone will know.

Disgruntled employees and competitors can do that regardless of whether or not it is true.

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