 Hey listeners, Eric Coffey here, the host of GovCon Giants podcast and today's guest Matthew Schoonover was on our show back in our beginnings, right back in 2019. Episode number six, he came on talking about joint ventures, mentor protege agreement, and now he's back discussing the new 2021 rules and how that impacts all of us small businesses out there. Stay tuned for this upcoming episode and make sure if you would like to visit and learn more about legal news and updates, his website, govconbrief.com. That's govconbrief.com. Stay tuned for this upcoming episode with the latest and greatest giant, Matthew Schoonover. Well, thanks so much for the opportunity to join. I'm Matthew Schoonover from Schoonover and Moriarty, LLC. We are a small law firm located just outside of Kansas City that works with small business federal government contractors on all of the fun things that come from working with Uncle Sam. So when we talk about size compliance issues, contract compliance, regulatory compliance issues, joint ventures, mentor protege, teaming, those type of things that help enhance small business competitiveness when we talk about federal government contracts, as well as on the more litigation side, bid protests, size protest and performance disputes. So we really try and work with small businesses that work with the federal government to help make their jobs easier. Now, Matt, I may ask you something, how long have you been doing this? Well, I've been a lawyer since 2010 and I've been doing this work since, I want to say, about 2015 exclusively. Okay. Okay. Okay. All right. I know that you also do some blogging about the issues as well. Yeah. Yeah. Our firm runs GovConBrief.com. That's a blog where we write about a lot of these topics as they relate to small businesses. So we'll write about GAO and SVA OHOD decisions. We'll write about regulatory updates as they happen. And we'll also kind of put out some tips and tricks for working with the federal government. We really design the blog to be a resource to small businesses in particular and we want the content to be accessible to small businesses and understandable. So we try and provide really just the tidbits of information that we think are important for small businesses on those particular topics. And if you haven't checked out GovConBrief.com yet, I'd certainly encourage you to do so. And if you have ideas for any topics that are out there, you know, if you if there's something that you're thinking about or that you've seen in regards to a federal government contract and would like us to write about it, drop us a line. We're certainly happy to do that. Now, and thank you for that. On your brief, and we'll get into some of the issues that you write about, but continuing from our last conversation on joint ventures at Minner Prodigy, I think it's been three years now. It was 2019. I'm sure there's a lot of things have changed. I know the mentor program has changed. Can you tell us about some of the changes that have taken place for the last few years? Absolutely. And Eric, when we when we joined each other a few years ago, that's when we were talking about the SBA's all small mentor protégé program in particular. And that program is is a wonderful resource for small businesses. And as its name implies, it really to be eligible for to participate in the program as a protégé. A business just has to be a small business. It can be any of SBA socioeconomic designations. It can be an 8A company. It can be a hub zone and SDBO SBA or a woman owned company, or just a plain small business. That program came about in 2016 and was designed very heavily off of the SBA's then existing 8A mentor protégé program. So the SBA had a wonderful program for 8A companies under which they could partner with mentors to get business development assistance. That program was very, very successful to the point that Congress encouraged the SBA to consider mentor protégé programs for the other socioeconomic programs as well. And it's out of that encouragement that the all smaller the universal mentor protégé program was born. But since the programs that is the 8A mentor protégé program and the all small mentor protégé program were very similar, it became a matter of time before the all small program essentially subsumed the 8A mentor protégé program. And we've seen that happen over the last year. It was late 2020 that the SBA's all small mentor protégé program essentially took over the 8A program. 8As are now rolled into the all small mentor protégé program. It's still the same program. You essentially get the same business development assistance or opportunities. It's still roughly the same application process. Now it's just instead of having two different programs, one of which is exclusively for 8As. The other one in which 8As can participate. Now they just have one program. Now on that program, what's the name of it now? It's now the SBA's mentor protégé program. Right, they dropped the all small mentor protégé program. You'll still hear me refer to it as the all small program. That's where it came from. That's what I'm used to saying. No, that's what I'm used to saying as well. That's why I want to ask you to get it. Yeah, I still slip into it. OK, now for small businesses that are starting out, mom and pop, solar producers, what are some of the common questions that you're asked? What are some of the common themes that you see that keep revolving since you've been in this industry for now? You know, 11 years. What do you see are some of the common themes that small and small businesses are challenges they're having? Areas of where they need assistance or technical expertise? From a legal standpoint, what are some of the common themes that you're hearing from small small businesses? And that's a wonderful question. And I think, you know, let me say that opportunities exist for small businesses with the federal government. They exist not only in the in the case of prime contract awards. You know, the federal government has a goal every year that at least 23 percent of its prime contract awards will be made to small businesses and every year seems to hit at least that top line number. And we're talking about billions and billions and billions of dollars worth of goods and services that are being procured directly by the federal government to small businesses. Beyond that, there's subcontracting opportunities there where even if a small business does not necessarily contract with the federal government as a prime contractor, that small business might be a valued teammate to either a large or small business prime. And so there's there's really a lot of opportunities out there for small businesses. But one of the main questions that I hear or main topics of concern, I should say, is is how do they break into that marketplace? You know, how do they earn their first contract or how do they make their business that kind of compelling case to earn their their contract award? And I guess I don't want to limit that only to brand new businesses because that's really something that I think every business faces when they want to work with the government is how do they make themselves more competitive? And we're seeing more and more of that concern. I think, you know, over the last several years, we've seen opportunities become more and more consolidated, fewer contract awards at greater dollar values. And so how do companies compete for, you know, that that smaller slice of perhaps prime contract vehicles? And that's that's usually where I see things. And so that's where I encourage folks to consider mentor protégés, you know, talk about ways that they might enhance their competitiveness, working with the mentor to develop their business. But beyond that, potential joint ventures or or teaming relationships, I think are really great ways for businesses to augment some of their their capabilities and their experiences to work with more experienced contractors to make themselves a better candidate for award. Now, I'm surprised that they would they would reach out to you a law firm about how to become more competitive. That's very surprising. Well, and let me say that that might not be their question. But I think part of what being a lawyer is about, part of what being, you know, a trusted business partner is about is listening and helping to understand what those concepts are. And, you know, sometimes I hear from folks that, you know, maybe they've lost out on an opportunity and are trying to understand why they've lost out and maybe you're exploring the protest options when it comes to that opportunity. And maybe that's where the conversation kind of comes up. Other times it's just discussing, you know, people have heard me speak on the mentor protege or on joint venture programs and they want to learn more about them. And so, you know, I think it's taking the time to understand what some of those concerns are and in helping to work with your clients to really better position them for success. Okay, that's fair, that's fair. What, when some of the questions that people have asked me before is why would a large company want to work with me or team with me or joint venture with me? What would be your response to that? Well, you know, I think there's really probably two main reasons. The first is altruism, you know, maybe the large business out there recognizes that the small business has potential. Maybe somebody that's in charge of the large business got their start because somebody helped them. You know, so maybe there is a little bit of giving back, you know, good corporate citizenship that's involved. Okay, fair. More often than not though, and I don't want to minimize that, really it isn't it. And so it all breaks down to money, you know. Would it be lucrative? Would it be beneficial for that large business to work with a small business? And in some cases, that answer might be yes. So if we have a large business, for example, you know, that large business just by virtue of its size and status is unable to bid on and perform small business set aside work. And so they're shut out of that marketplace, at least as a prime contractor. Maybe they can do some teaming, but you know, largely they're shut out. And so maybe that large business says, I'm willing to mentor a small business company and provide them some mentorship, provide them some business development, but then as part of that, we'll work in a joint venture and now that joint venture will be eligible to bid on that work by virtue of our participation in the SBA Mentor Protege Program. And so there's a little bit of, kind of you scratch my back, I scratch yours. You know, I get access to this market share that I didn't otherwise have access to. And I think largely that is effective for large businesses. If I'm a small business and I'm working with a large business who does nothing about federal contract and I want to use that angle, you know, a lot of times we've got, we have to convince them of why they should do that. Right, so what do we, what do we tell the large business that doesn't know about federal contracting? Yeah, and that's always a tough question to be with you. That's a very, that's a tough conversation to have, especially if they don't know of federal government contracts. Now I will say if they don't know of federal government contracts and they're a large business, they're missing out on the opportunity, perhaps to be even larger. And they're missing out, you know, the federal government's the world's single largest purchaser of goods and services. So odds are, whatever a large business does, whatever they make, whatever they sell, odds are the federal government is gonna buy it in some shape or form. And so they're really missing out on opportunities, lucrative opportunities. And for small businesses who wanna work with mentors, I encourage them to make that as part of their sales pitch, so to speak, you know, it needs to be a value add. Being a mentor, being a productive, being a good mentor takes a lot of time, takes a lot of investment from the mentor company. And I think if a protégé just goes into it with the mindset of what can I get from the mentor, they might be met with some resistance to getting that partnership in place. Whereas if they can tell the mentor, here's what I would expect from you, but here's what you might get in return. The opportunity to work on some of these projects, you know, you can take up to a 40% equity stake in my company, which means, yes, you're spending money up front, but the more successful I am, the more successful you are. So the opportunity to kind of speak in that language, to explain to them what some of the benefits might be, I think is really where small businesses should think about focusing when having that discussion with potential mentors. Well, they brought up something really interesting. They can, you said they can take up to a 40% stake in your company. Yep, under the mentor protégé regulations, a mentor can take up to a 40% equity position in its protégé for the purpose of helping the protégé raise capital. And so that's very enticing because depending on how the parties structure their relationship, you know, in theory, that mentor would get a 40% return on whatever the protégé's profits were, you know, if they take a 40% equity position for the profit in theory. But keep in mind too, that if they form a joint venture, then of the work that the joint venture performs, the mentor can provide up to, or can perform up to 60% of that work and would get profits commensurate with that percentage. So they could be getting up to 60% of the profit from their work of that joint venture. And then, you know, the protégé would get the remaining 40% under that scenario, but the mentor would get 40% of that 40%. And so really the SBA has built in incentive to get mentors to perform the assistance under these programs. And, you know, that's one thing that I caution folks on is that the mentor protégé arrangement between a mentor and a protégé, specific mentor and protégé is just a vehicle under which they're gonna chase a contract. First of all, the SBA might look at that and say, well, is the protégé really gonna be getting any benefit under this? Or is it all gonna go to the mentor? Is this mentor protégé just a vehicle under which the mentor is gonna make itself eligible to compete for this work? But beyond that, that's one concern is maybe the SBA would look at that kind of, you know, just scratch your head a little bit. My other, you know, concern is, or in my experience, when there's a relationship, a mentor protégé relationship that just exists to chase a specific contract, that's sometimes where the relationship goes awry. You know, because what happens if they don't reach that, if they don't earn that contract, is there a commitment to the relationship in either party beyond that? Is the relationship really such, you know, that they would have gotten into the mentor protégé, were it not for that contract? So there's considerations that I always tell folks to keep in mind before they enter into these agreements, particularly if it is just something where maybe they're gonna chase a contract. Now, that brings me to another question. I was under the impression that in order for them to approve your joint mentor protégé agreement, you had to have a specific contract that you wrote in there as part of that agreement. For the joint venture itself, yes. Right. Yeah, but so that's for the joint venture. The mentor protégé program is different. It's broader than perhaps just the joint. Okay, because the previous, and again, I'm referencing the old 8A1. So the old 8AJV mentor protégé had to be approved by the SBA. Right. Okay, part of that approval process required approving the actual joint venture to make sure it comply with the rules, correct? Well, the agreement. Yes, so under the mentor protégé relationship, the mentor, the protégé says, here's the business development assistance I need. Exactly. Here's what I'm gonna give you. And in the parties provide benchmarks and timetables and all of that type of stuff. Correct. That business development assistance can include but doesn't necessarily have to forming a joint venture relationship under which the parties will jointly pursue a specific contract opportunity. Right. So the mentor protégé program relates to overall business development and then the joint venture relates to the specific contract which could be part of that business development program. Okay, no, I just wanna be clear because that's like, I knew that before we had to write in there the specific project that we were chasing. And for a joint venture agreement, you still do. Okay. So we've seen a shift in the SBA's regulations and the SBA updates its joint venture regulations pretty frequently. I don't wanna say it's every year, but it's something like 18 to 24 months. And we just went through another update on those regulations. And as part of them, so you are correct that the old eight A joint venture regulations required the SBA to pre-approve those joint venture agreements. SBA no longer has to pre-approve eight A joint venture agreements for eight A competitive awards. It does for sole source, for eight A sole source, but not for eight A competitive. But in those joint venture agreements, regardless of the joint venture, no matter what kind it is, you are gonna have to specifically identify a contract that you're bidding on and provide some contract specific information for the joint venture. I always encourage folks, and this is something I cannot repeat enough, is before a joint venture submits its bid, make sure that you have a compliant joint venture agreement for that specific contract opportunity. Don't just rely on an old joint venture agreement because again, the regulations do update. And in fact, we just saw an update in November, 2020. And so joint venture agreements that might have worked in say July, 2020 are now out of date. And so you always wanna make sure that you're complying with the latest regulations because if you're not, or if the joint venture agreement does not, then the joint venture could be found ineligible for the work. That's interesting. That sounds, what would have to change about my old agreement? Well, it depends. It depends on what type of agreement you had and when it was made. So one of the kind of sneaky changes that we saw in November, 2020 was for small business mentor protege joint ventures. The joint venture agreement now says that performance of work reports, both an annual performance of work report that explains how the parties, the joint venture met the performance of work requirement, annual report has to be provided within 45 days at the end of the operating year. The project and performance of work report has to be provided within 90 days at the, within 90 days at the end of the project. That is different than what the other socioeconomic regulations require, which require financial statements, either quarterly financial statements or project and financial statements to be provided within 45 or 90 days respectively. So depending on the type of set aside, an old agreement might not be compliant with the new regulations. It's a very kind of sneaky provision that's in there and one that I hope the SBA soon modifies to make consistent thank you with all of the regulations. But until it does, I certainly encourage folks to review their agreements very, very carefully. That's interesting. What are the rules that they change? Well, they changed a lot. They changed a lot. I know they did. I had Rob Wong on here not too long ago. Yeah, I saw that. I saw that. Rob's fantastic. Right. I think Rob stuck all those rules in there. I think. Hey, listen, the good thing is it's helping, right? Make the program better, right? Yeah. And for more people, so it's more accessible. And it is. So that's the positive side of things. It is. And I think the kind of cynical responses, oh, those lawyers like to keep themselves in business by changing. I was thinking that, but I didn't say it. You know, I get it, I get it. But really the SBA is trying to make its programs more accessible and easier. It's regulations easier to comply with. And I think case in point is the change for the three and two rule. So the three and two rule is an old rule for joint ventures that is essentially an affiliation rule that said a joint venture cannot win more than three contracts over a two year period measured by the date of the first award unless it's joint venture members want to be considered generally affiliated with each other. But the way around it is simply to form a new joint venture. So it was this really silly, hard to understand and even harder to apply rule that acted as a kind of a catch for the unwary where the only people that would ensnarl were folks that didn't have a living, breathing understanding of the regulations to know that this was in there. And so it was really unfortunate. And SBA to its credit has recognized that and it's modified that rule to make it easier to understand. And essentially now what the regulations say is that once a joint venture wins its first contract, it can no longer bid on any new contracts more than two years later. So today, let's just assume today is April 5th, 2021. If Eric, if you and I form a joint venture and win our first award today, April 25th, 2021, our joint venture can continue bidding on new contracts until April 5th, 2023. We can perform any of those contracts that we bid on even if that bid or that award comes after April 5th, 2023. Our joint venture just can't bid on new contracts after April 5th, 2023. And if it does, we'll be considered generally affiliated with each other. Now, way around it is still for us to form a new joint venture that will then bid on new work. But at least this rule is easier to understand. It's easier for folks to say, I know I've got a two year cut off after which I can no longer bid on new work. No, it gives me a definitive hard stop date. Exactly. That I can measure by, I'm like, okay, let me go back. Well, you're not trying to count when was I awarded this contract, when did I bid on it, all of that type of stuff. That was very hard to apply. And so now you can say, okay, I have my cut off here. It's an objective cut off. And it's easy for me to understand when I have to stop bidding that work. When someone is considering working with a large business that understands federal contracting, what types of things should I be cautious about before deciding upon pursuing a relationship of a joint venture and or men are pros and jay? What are some of my red flags? What are some of the warnings? That's a wonderful question. And let me say that there are, by and large, a lot of the large businesses out there are great partners to work with. Particularly if they've grown through their size standard, a lot of them understand and get it. But I will say that keep in mind that the large business contracting world is different than the small business contracting. There's a whole new set of regulations and requirements when we talk about small business federal contracting. So I encourage folks, don't be reliant on your partner to know what the ins and outs are. Don't be reliant on them to tell you what you can and can't or shouldn't do under the regulations because they might not know about them. The large businesses don't generally do a lot with the SBA's regulations. And that doesn't make them a bad partner. That doesn't make them a near do well or anybody that's trying to defraud the government or anything like that. It just means that you need to have a better understanding. And in some cases, we've done this on behalf of our small business clients before where we've had to help educate large businesses to say, if you wanna compete in the small business contracting realm, here are the regulations you have to keep in mind. And almost uniformly in the vast majority of instances when once you have that understanding, once the large has that understanding, then they know, okay, I've got this out there, here's what I've gotta do. Here's what I have, can't do, here's what I should do, all of that type of stuff. But sometimes getting them to that point, providing them that education can be a little tricky. And so I encourage folks, don't just rely on your large business teammate, your large business mentor, your large business joint mentor, partner, whatever the case may be, to know those regulations for you. To, would you encourage someone to team with the large business first before doing a joint venture mentor proposal? I think, yes, I would. And I think that's an absolutely great way to get to know your potential partner. You know, it's a relationship. And you don't wanna walk into it without a good working understanding of that company, how it does business, and who you're going to be working with, particularly on the mentor protege side. I think teaming relationships are a wonderful way to get to know potential partners and to say, maybe I don't wanna work with them. This was a great opportunity, but when we were actually on the ground working, we didn't get along that well, or I didn't like the way they did things, or they didn't like the way I did things, or you know, what have you, or they were a great partner. You know, it's somebody that I would recommend any small business work with. Knowing that, I think is invaluable. I mean, that's the type of competitive intelligence or business intelligence, that firsthand information that is just invaluable. Is there a place that we can go to find out if the large business, say, did something wrong to the small business or did something wrong at all? Well, and you know, how do we do our own like due diligence, maybe some homework? Yeah, I'm trying to think of a, I know SBA publishes a suspension and debarment list. Okay. It would be pretty outrageous for somebody. I think what you're talking about is more, is somebody a good partner to work with? I think it's appropriate to ask for references. Okay. To say, you know, do you have a small business that you have worked with in the past that we can talk to? And they might say, yeah, here you go. You know, you can work with, you know, X, Y, Z corp. We do a lot of work with them. Or I tend to think that when small businesses are doing that due diligence, they know their industry. They know people that work in the industry. Maybe they've worked at that old company or they know somebody who does and they can ask those folks. I mean, people are always gonna have NDAs and all of that type of stuff that might limit what they can say in certain circumstances. But I don't think it hurts to ask. You know, check LinkedIn. That's a wonderful place to see, do I have a connection that works here that used to work here? That maybe I can run some of these questions to ground with. Ask the agency if they have worked for folks. You know, unfortunately, past performance information is source selection material. So it's not like a contractor can go into bars and say, I wanna find something for, you know, Lockheed Martin to see if they're a contractor. But, you know, maybe they have a sense of, hey, is there something I should be aware of here? But knowing those relationships, I think is very beneficial to small businesses. Yeah, no, that makes sense, it makes sense. The, there's been some other rule changes that's happened at the government level. I know one is the Bi-American Act, but then the other one is the rules affecting LPTA. Yep, LPTA has been, that's, so lowest price technically acceptable, that is the acquisition strategy in which the federal government says the bare minimum technical acceptability all by so long as it's the cheapest option. You know, it's primarily concerned about price. That contrasts with best value where the government's saying, I'm willing to spend a little bit more money in some cases if it gets me a better product or a better service, if it's worth it to me after a trade-off of the benefits there. LPTA has kind of fallen out of favor with the federal government. And, you know, we've seen it happen over the course of the last few years with several NDAAs in a row where Congress was limiting, particularly the Department of Defense's ability to buy things on an LPTA basis unless certain criteria were met. Recently, we saw an update to the FAR. I think it's off the top of my head. It's either FAR 15.101-2 or 15.102-1. I can't remember. But the FAR has now limited the use of LPTA procurements in most circumstances. In order to use LPTA going forward, the government has to essentially be convinced that better technical specs won't matter and that price is really the determining factor here that spending more money won't get it necessarily a better product and it has to document that decision. And I think that's important because when the FAR was updated, it applied not only to DOD, but to civilian agencies as well. And so we're seeing this pushback against LPTA on a government-wide basis, which is very, very interesting and I think has the potential to be really beneficial to small businesses. A lot of times small businesses have less flexibility when it comes to their pricing, but where they really excel is offering better products or better services, more innovative solutions. And so to the extent the government is pushing things towards that best value acquisition model, then I think small businesses might really benefit from that. And so I encourage folks, if they have an acquisition out there that they're chasing and they see that it's been set aside on an LPTA basis, think, hmm, I could probably compete better if this was under best value or if price was less of a consideration, then to consider your options, reach out to the contracting officer to ask if it should be best value or even consider a pre-bid protest challenging that term and saying, this should be best value. And so I think that one, that change really has the potential to maybe benefit small businesses. We'll see, it's a relatively new change. I think it came about mid-February, 2021 end of February, 2021. And so we'll see how this kind of impacts small business contracting going forward. Well, I can tell you, I was in a clubhouse room with a contracting officer who said she's still using LPTA. I think it makes it simpler for them in a lot of ways. Right, right. When they're doing it, they line up the orders or the bids and they say, who's the lowest price? They take that one and they say, is this technically acceptable? If it is, great, that's the award. If it's not, then they go to the next lowest price and see if that one's technically acceptable and so on until they find it. And so I think it does make it easier for agencies. And after all, they save money in theory. But I'm not sure it makes sense really for businesses. And for you and I, when we purchase something, it's always that thought that we have of, is this something that I should spend a little more money on? Right, oh, definitely. If I get something that's better. Now, under a best value, the government still can say, listen, we're gonna go with the less expensive one here. You know, the price premium isn't worth it to us. They have that discretion, but it does grant them discretion. And so that's why I think it's important. You know, something that happened to me recently on a project that was an A&A sole source, they question our local geographic area, okay? Now, this has just started happening recently. I've seen it in the past a long time ago, but it came up in question on a project that the government was trying to award me. CFR 124.5014 now requires A&A eligible firms to have a bona fide office place. On a recent project, we were challenged with not being a localized A&A firm and not having a bona fide office in the place, but it was only because the contracting specialist or contracting, it wasn't the contracting officer. It was the contract specialist that came down from legal. She turned to the contracting officer, they overruled because it said we were within a geographical area. So we weren't in the same state, but we're in a geographical, what they call metropolitan statistical area. Have you seen that? Well, we're seeing more and more of it. You know, I've heard more from contractors, particularly on the construction side. Yes. That this is a concern. And then the A&A program, they do require A&A companies to have a bona fide place of business within that geographic scope now. I think- They did not require that before. Well, and, but we're seeing more and more from contractors saying, this is something that I'm hearing. And in fact, you know, I've heard of some BOS is taking it, A&A business opportunity specialist is taking it, you know, really to an extreme. And so we'll see, I think as this again, because they did just update the regulations, I believe with regard to this specific requirement or clarified them, we'll see how this kind of continues to play out. But certainly with regard when it comes to A&As, you know, there have been a lot of changes to the program over the last year. Now, some of them have certainly made it easier for A&A companies, you know, when we talk about increased economic disadvantage thresholds, when we talk about the potential for another year of eligibility, depending on the company was in the program based on COVID. When we talk about changes to the application process, I think overall, again, the regulation updates that we've seen from the SBA are by and large, things that help A&A companies either stay eligible or maintain their eligibility. Right, right, right. OK, now it was something that came up on a recent project that it's actually still in the, it's still up in legal. We're waiting for the final contract to come down, but when I spoke to the contract officer representative and asked what was going on, that was the issue that popped up. Gotcha. Was that the whole quantified office. Yeah. So it's interesting because one of our complaints, I would say, to the government was that they were awarding so many A&A contracts to outside companies outside of the state. That was actually an issue that we had because a lot of companies were coming from D.C. and then some of them from as far as Washington all the way to the East Coast and taking the bulk of the work. Yeah. And so that was actually an issue. And then to see that regulation come out, I go, wow, this is interesting. It almost used against you in this. Right, exactly, it's almost now used against me. Right, in this particular scenario. And again, this is a project that we put together numbers over a year ago. Oh, wow. Yeah. Well, they had to wait for the funding and then now this whole new regulation came out. So it's probably 16, 18 months. Well, and I think this goes back to your question earlier of what is some advice for small businesses that are looking to break in? And I think the number one there is patience. Patience. Because you can submit a bit on this one. It is not uncommon for a year plus to go by, frustratingly enough, most likely in silence, before you hear anything about the award. And the process from the government side is nothing's fast, of course. And there's a lot of different layers that ultimately it has to go through. And really, the more complex the acquisition, the larger the acquisition, it only increases that. So certainly, it's one of those hurry up and wait type things where you're rushing to it, you're working like crazy, and then all of a sudden it just goes silent forever. And then one day you'll hear and hopefully be off to performance from there. So it's always a ribbon wait. Yeah. So tell us about the new Buy American Act. What's going on with that? Well, we're seeing more and more, obviously, each administration when they come into office, every administration, no matter the party, wants to increase American manufacturing and American capabilities and reliance on American-made goods. And we're certainly seeing that with President Biden. And we've seen the Buy American Act be updated recently to include or excuse me, to modify the domestic content percentages. I don't have them off the top of my head. But really, one of the things that President Biden, I think, is looking to do is increase, how do I want to frame it, to increase the teeth or sharpen the teeth behind the Buy American Act, so to speak, so that American manufacturers have a leg up, really, particularly when it comes to federal government contracts. We're seeing, I think, he wants to rely less on waivers of the Buy American Act under federal contracts and, in fact, has issued an executive order that creates a new made-in-America office within the Office of Management and Budget to oversee that waiver process and hopefully reduce them or the reliance on them when it comes to federal government contracts. So over time, I think, we'll see an increase in domestically sourced items under federal contracting. When you talk about the waiver process, is that something that you commonly work with or no? I'll be honest with you, it doesn't come up, at least in our practice, a great deal. It does come up on occasion, but I won't profess to be an expert off the top of my head. It's always something that whenever it does come up, I'm usually pulling up the statute and the regs to make sure I've got it in front of me. But we do see it on occasion. And the reason I want to ask is, in construction, a lot of our products, particularly like screws, fasteners, there are no American-made products. Even if you buy them from an American-made company, that was not their place of origin. Right, they're getting it someplace else. And so we are faced with that quite often. And I just, we talked about waivers. Can you explain to the people listening what is a waiver because I used to believe that when it says buy American, that meant it has to be American-made. Yeah, and usually that is correct. Now, in some cases, the government can waive that requirement for the Buy American Act, usually because there is a specific item that they believe is not domestically sourced. That's really going to depend. I always tell folks, read your contract very, very carefully. Obviously, you're going to know more about what those requirements are after reading the contract. And each contract is different. And so you want to read it very, very carefully. You want to read the solicitation very, very carefully because this should be in the bid. And so you should know before you actually bid on the work what it is. But yeah, in some cases, they can certainly waive those requirements. And my contract, it'll have Buy American Act A through G, let's say. And if your item, if you can list out A through G, that you are potentially eligible for waiver. But then it has to still be approved by the contracting officer. Yeah, yeah. So work with your contracting. You really want to work with them and make sure that they're understanding the difficulties, obviously, that you might face. And we'll see how that process changes going forward, obviously, based on the new executive order and the implementation of the new Made in America office, how that's going to change the waiver process going forward. It'll be very, very interesting to see. One other thing that will be interesting to see as we talk about this particularly in the construction realm is that as we sit here today, Congress, I believe, is currently debating a massive infrastructure deal. And we'll see what that means for small businesses. But hopefully, it's a good thing. If the federal government is talking about spending $2 trillion approximately on infrastructure projects, hopefully that means more work, obviously, for small businesses, either on a prime side or through subcontractors. And a lot of this work very well might come through the A-day program. Right, right, right, right, right. What other questions have you received recently regards to socioeconomic set-asides? Well, we're seeing still some questions, obviously, when it comes to affiliation and size issues, how it impacts small businesses. The threshold question or when we say small business, obviously it means something to the SBA. And so I tell folks, you wanna know if your business is actually small. And SBA determines that based on various calculations. It's not just a hunch, but it's something that you need to know and you need to understand when you're bidding on this work. And you need to not only understand it, so you know if you're eligible for a specific contract or for a specific socioeconomic opportunity. But I've had some clients say, listen, I've grown a lot, I'm doing really well. I've gotta take my foot off the gas a little bit because I need to stay small. And if I keep up this pace, I've got very limited time left. So I'd rather ease up just a little bit now and hopefully get myself a little more time as a small business versus keep going, breakneck, breakneck, breakneck. And that's something that I think it's appropriate for businesses to know so that they can make those informed decisions about their best paths forward. And so, certainly you wanna know, am I small? How much longer am I gonna be small? That type of stuff. I think a lot of us wanna know who's that guy or girl. Yeah. And they're holding up on the gas pedal. It's like, no, no, wait, wait, slow down. I've had a couple of folks say, I've gotta pass on this opportunity. It'd be a great opportunity for them, but there's risk if they win it. Where they say, well, based on the size of this contract, if I win it, yeah, it's a great contract for me, but long-term, it's not what I need. Yeah, I was recommended a book. I can't think of the name. And it was a story like that where the company went from small to large and then they'd lost to re-compete. So now they were large, even though they didn't have the sales, but then they could not compete with small business contracts. It's kind of a conundrum. Well, it is. And then not only that, not only can they not compete for small business contracts, but then all their competitors, they're out there competing against the largest businesses that do what they do. And so, yeah, you're kind of stuck in this position of I'm not small, but I'm certainly not large. What do I do? And quite frankly, we've seen Congress think about this more and more. And we've seen the SBA think about this more and more over the last few years when we talk about these mid-market businesses or middle-sized businesses. And that's really one of the reasons why in 2018, Congress passed the Small Business Runway Extension Act, which gave businesses additional runway time to be considered small under receipt-based NAICS codes and why we're seeing the same thing happen for employee-based size standards here. And so we'll see, obviously, hopefully this helps, but there's also the subset of businesses out there where these changes might hurt. If they're- And the other side. Yeah, exactly. They're knowing where you are in that. I mean, I tend to think that that's, you can't strategically plan your business without knowing all of the facts. And too often in my mind, businesses don't think about their size or don't think about affiliation issues until there's a problem, until they go to win a contract and somebody protests them or until they go for a socioeconomic designation and realize maybe we're not small. And so knowing what those requirements are and knowing, okay, maybe I do need to make some changes here, I think really helps business owners more strategically plan. You know, it's interesting. I had that issue with affiliation and for me and construction, it's really tough because if you've been around for some time and construction industry, you've learned who are the good contractors and who are the bad contractors. So you tend to only work with the good ones. So it gives the appearance of affiliation, but really is it's just a wise business move because these other guys, they string you along for money. They give, you know, they don't allow you to pass your inspections. They find reasons to hold back your draws. And so you really, it's hard for you to do business with them and over time you've learned, okay, I just wanna work with these one or two companies because I never have any problems. You know, they work with me, they don't come in and if I'm doing floors, they're not gonna come in and tell me to put the floors in and then paint the walls afterwards. Silly things like that, right? And then hold me accountable because they're behind schedule and they did things out of order. So I know that personally I had that issue with the SBA on the affiliation just because of that. And it was a hard thing to argue. I thought I was being a prudent business person and they thought I was working for the man or whatever the case may be. And you're right. And that's why when I talk about affiliation, I say affiliation is really an insidious concept for small businesses because you can have an affiliate and not even know it. In your case, you're saying, I'm just doing what a smart business person does. I've got a great partner here or a few great partners. We treat each other well. I know how they work, they know how I work. Absolutely. But you're right that in some instances the SBA might look at that and say, that could be indicative of affiliation. And so there in some cases this conflict between sound or prudent business practices and what the SBA says you can and can't do. And everything's always a question of a degree under the regulations. But again, for small businesses knowing what those risks are, I think is vital. To understanding is there something here that I've got a guard against because I don't want the SBA to look at my size in having any questions. If I'm ever called to account, I want to say, here you go. I don't have any affiliates. I know these answers or I have a risk of affiliation but for these reasons it doesn't apply or I'm still a small business or what have you. Yeah, it can be a very, very difficult topic for small businesses. I'm going to flip the subject here. You've recently, you founded your own firm with your partner. How's experience been? It's been great. I mean, it has exceeded my wildest expectations. I am very, very blessed in a lot of ways but certainly I have a great team with me. My partner Matt Moriarty and I, I think get along well and compliment each other very well. We're joined by Ian Patterson and John Maddox who are just great attorneys. Julia Peterson helps run the show behind the scenes and overall we are a wonderful, wonderful team and I'm every day more and more grateful for them and amazed at the work that they do because I couldn't do what I do without them and for me, that's, I think before when I was working with small businesses and small business owners, I think in some ways there was always that disconnect where I didn't necessarily understand everything that they'd been going through and now as a small business owner myself, I think I can, I've not stood in their shoes but we've been in the same general vicinity. You know, where we all have, no matter what industry we're in, we all have stuff that keeps us up at night, we all have goals that we're trying to meet and I tell you what, I think I listen better now that I've got this business than I did before and so it has been a wonderful, wonderful experience. Like I said, I can't speak highly enough about my colleagues because they really do make it possible. Oh, that's, I actually, I had Emily Harmon on recently and she said the same thing, transitioning from working, well, again, she worked for government to now coming out and being a small business owner, lots of lessons learned. Like she said, she says, I would give the advice but from the standpoint of a government employee not from my actual small business owner. Exactly right. And so it makes a huge difference now that she's on the other side. Yeah, and now I think you're a little more attuned to the goals and the concerns maybe that another small business owner has and nobody has it easy, no matter what they do, no matter what industry they're in, nobody has it easy and I think understanding that is very beneficial, no matter what industry you're in. There. I think we, on the episode that we lost, I don't know if I got around to asking the Amazon question, what was your most recent purchase on Amazon that you enjoy? Well, you did ask me and my answer then, I'll say was much better than it is now. All right, give me the answer to the episode we lost. Okay, well, let me tell you, my answer now is grass seed. I recently bought grass seed on Amazon because I didn't want to go to the hardware store. Grass seed from Amazon, okay. Yeah, my answer that I had then, it's all gonna turn brown anyway, right? So where's the matter worry about it? In your area, definitely. My answer that I had then, I thought was much better because we had, I can't remember if we originally recorded right before or right after Christmas. I don't remember. I think it was right at because we bought for my, wait, no, no. You bought a gift for a child. Yes. For my daughter. Yes, you bought a gift for your daughter, okay. Trampoline that goes in our basement. Yes, there you go. And my wife and I literally just assembled it the night before we spoke. And in the instructions, you unrolled the scroll of instructions and it looked like it was printed in a different language and one of the first lines said like, this will not be fun for you. And my wife and I did it together. In like an hour, we kind of had fun doing it. And then we got to see my daughter's reaction to this trampoline. And my kids are at home for school and just cooped up. And so it was a gift for my daughter, but more than that, it was a gift for my wife. So hopefully my daughter can burn off a little energy, you know, but that was a much, much better answer and a much better purchase, I will say, than my most recent purchase. All the grass seeds obviously serve some benefit. Yeah, hopefully, you know, when that starts growing, then she'll get out there and run around. How many kids do you have? I have two. So I have a son who is seven and my daughter is four. All right, thank you. That humanizes you. A little bit. Yeah, we need some of that. You know, after an hour of speaking legal speak, people want to know you're a real person. Hey, I'm always happy to talk about my kids. You know, they are, I miss them every day that I'm here. You know, my daughter actually just came to work with me on Friday. Oh, that's fun. Well, they were nice enough to put up with it and act like it wasn't a major distraction, but you know. I want to see what happens when they're like 11 and it's like, you know, bring your kids to work day. Yeah. I know what my son said he'd rather go to school. Yeah. Because I was in construction and I said, you're going to work with me. You're definitely going to have a shovel in your hand. Yeah, you're going to hammer. You're going to hammer. He's like, no, can I say a school teacher? When he was little, yeah, it was all, it's fun. But when they become pre-teens and teenagers, they said, no, I'll just stay in school. It's fine. I'll stay at the computer all day anyway because all the other kids will be gone. Yeah. Well, you know, it's, but that's, it makes it all worth it, right? Because they go home and see them and talk about their day. I mean, all of the fun stuff that it's just great. No, no, let me tell you, I was, it's funny. I was telling someone, my nephew had his six year old birthday party Saturday. Okay. And a friend of mine invited me to this private event with like one of the founders of Facebook. And I said, no, I'm going to go to the six year old birthday party. And he says, really? I said, yeah, I said, because when I'm 66, he's going to remind me, he says, uncle, remember when you went to that private event and you missed my birthday? He says, good point. Tell him I said, hi. I said, yeah, exactly. Plus there's probably better cake at the birthday party too. Better, yeah, better. I think I'm sure at the birthday party. Yeah. I mean, everyone there was happy to see me. Yeah. Exactly. So I didn't feel out of place at all. Water slides, water guzz. That sounds pretty fun to me. That sounds pretty fun to me too. So I'm good. Listen, before we wrap up, tell us an odd place or odd job that you've had in the past. Well, one of my very first jobs, I worked at a laser tag place. Get out of here. Laser tag arena. And I would work Friday nights and the place would be open until one o'clock in the morning. And we had laser tag regulars that would come in and hang out with us and all of that. So it was actually kind of fun. I like that. Yeah. I like that. I couldn't play it now. I'd be terrible at it now. I was terrible at it then. But I tell you what, it's still pretty fun. No, I played laser tag once or twice. It was hard for me. Yeah. It was hard. I think paintball was easier than laser tag. Oh, really? I felt, yeah. I felt that way. Because you played paintball on a date and you played laser tag in the dark. That's true. For me, it's just, I don't know, maybe my senses were just, they didn't work well with that. That is very true. It's dark. There's like neon paint and fruiting and loud music. At least there wasn't the place I worked and very disorienting. You're exactly right. That's for me, at least in a day time, I'm hiding behind like will barrels and tires and trees, stuff that I did anyways growing up. So that's very normal environment for me. Yeah. Even climbing in those big tubes. Yeah. Yeah. I mean, I had BB gums growing up in slingshots. So that, we did that anyway. So that was very normal. It's being in a dark place with neon lights. It's like messing with my recta. It's like I can't. I get you. Yeah. Yeah. Yeah. I tell you what, we should all get together and do some paintball then. How about that? That's what I think we should do. Govcon paintball. That would be fun. I think that would be great. You heard it here first, everybody. Govcon paintball. I think it's better than a convention. That's true. That's true. I mean, this could be the convention. Yeah. And also, you know what? Maybe, okay, how about this? How about this? Maybe instead of having a golf filing or in addition to the golf, we could have paintball. There you are. If you don't want to go play golf, we go play the paintball. Tell Michelle from my hotel account. I'm sure Michelle is pretty open-minded. Yeah. She'd probably go for it. She'd be really good at paintball, too, I think. I think she probably is good at paintball. All right, give us some parting words so we can let you go today, sir. Well, thank you so much. It's a pleasure to join you again and we got to do it more often. Again, I'm Matthew Schoonover from Schoonover and Moriarty. It's been an absolute pleasure to join you and to talk about some of these issues and I certainly hope that everybody has a wonderful 2021 much better than 2020 and that we're all back together again very, very soon. Yeah, and I hope that we were able to show you guys that at the, you know, look, this is a serious subject matter. And again, we all have small businesses. We all have challenges. We're risking our money. We're hiring people and we've got a lot on the line, but at the same time, you know, we can laugh and joke and have a good time. So I hope at the very least, you know, people are able to see that. Those of you who stayed all the way to the end, you can see that. So maybe I'll have Maria move this up to the front. But there we go. So give us your website and give us the govconbrief.com site as well. So we've got govconbrief.com, all one word. We have schoonoverlawfirm.com, all one word. That's S-C-H-O-O-N-O-V-E-R, lawfirm.com. And my phone number is 913-354-2630. If you have any questions, give me a call. I'm always happy to chat. And no, Matt's a really great guy. We've actually worked with him here at Govcon Giants and we've referred people to him as well. So I can definitely vouch for that. He's a pleasure to work with. Very, he's a pleasure to work with. Easy to work with. And he's not gonna steal out of both pockets. So listen, Matt, thank you so much. Thank you, sir. It's been a pleasure. Take care. Thank you.