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Comment by bladegash | Hacker News Reader

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).

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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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