Washington Metropolitan Area District Office Growing your Contracting Opportunities.

Washington Metropolitan Area District Office

Growing your Contracting

Opportunities


Small Business Act, 1953

“It is the Declared Policy of the Congress…to insure that a fair proportion of the total purchases and contracts or subcontracts for property and services for the Government be placed with small business enterprises.”


Defined by number of firm’s employees

ORDefined by firm’s annual revenues

(Different for each industry, organized by NAICs code)

Criteria can be found at: www.sba.gov/size

What is a Small Business?


Federal Procurement

$440 Billion +

per year(2009)

U.S. Government:

The World’s Largest

Customer

Federal Contracts =


Small Businesses: 23%

Federal Procurement

PROCUREMENT TARGETS:

$440 Billion +

per year


Federal Procurement

Small Businesses: 23%

Service-Disabled Vets: 3%

SDB: 5%

Women-owned: 5%

HUBZone: 3%

PROCUREMENT TARGETS:

$440 Billion +

per year


• District of Columbia• Montgomery County,

MD• Prince George’s County, MD• Fairfax County, VA

• Loudoun County, VA• Arlington County, VA

• City of Alexandria, VA

• City of Fairfax, VA

U.S. Small Business AdministrationWashington Metropolitan Area

District


FY 2010:

$73.7 billion in Federal contract dollars

for work in District

Federal contracting in the Washington Metropolitan Area

District


What part does the SBA play in procurement?

1. Keeping Score:

SBA negotiates annual procurement goals with each Federal agency

Ensures that the combined goals > 23%

Reviews each agency’s results

Issues annual Small Business Procurement Scorecard for entire Federal Government


2. Counseling and Training:

Procurement training and matchmaking events throughout region.

Resource Partners help business owners find and bid on procurement opportunities.

Small Business Jobs Act of 2010: Small Business Teaming Pilot Program



3. Certification

SBA-Certified:

HUBZone Empowerment Contracting Program

8(a) Business Development Program

Self-Certified:

Small Disadvantaged Businesses

Service Disabled Veteran-Owned Businesses

Women-Owned Small Businesses



Very Important:SBA certification only applies to Federal

Agencies in the Executive Branch.

State, County, and Municipal agencies as well as other branches of the U.S. Government may have

their own certification programs.

Certification by one of these authorities does not automatically confer certification by any others.



Designed to simulate economic development

and create jobs in urban and rural

communities.

HUBZone = Historically Underutilized Business

Zone



HUBZone contracts are contracts awarded to a qualified HUBZone Small Business Contractor (SBC) through any of the following:

Sole source awards

Set-aside awards based on competition restricted to qualified firms

Awards to qualified HUBZone business through full and open competition after a price evaluation preference in favor of qualified HUBZone SBCs.


HUBZone Requirements

Must be a SMALL business

Concern must be owned and controlled only by US citizens

Principal office of the concern must be located in a HUBZone; and

At least 35% of the concern’s employees must reside in a HUBZone



Helps eligible small disadvantaged businesses grow and become sustainable.

Training in business management & marketing

Opportunities to team with other companies

Support when competing for Federal contracts


First comprehensive revisions to 8(a) program in more than 10 years: effective 3/14/2011

Technical and Substantive changesRegulations now more consistent with

existing and recent legislationReduce potential waste, fraud and

abuseEnsure program benefits flow to

intended beneficiaries


Program enrollment = 9 years

Program participation divided into 2 stages:

Year 1 – 4 Developmental Year 5 - 9 Transitional

Must maintain eligibility throughout enrollment



Completion of Program Term

A concern may leave the program by:

Expiration of the program term (Nine years)Voluntary withdrawal or voluntary early

graduationGraduation (§ 124.302)Early graduation (§§ 124.302 and 124.304)Termination (§§ 124.303 and 124.304)


New Suspension Rule –

If the disadvantaged individual owner(s) of the 8(a) firm are called to active military status, SBA will no longer terminate the firm.

Firm may elect to: be suspended from program participation until

original owner returns from duty (nine-year clock stops during suspension, resumes from that point), or

continue participation if another disadvantaged individual(s) assume control of the firm

For Military Service


8(a) EligibilityUnited States citizen

Socially & economically disadvantaged

Own unconditionally at least 51% of concern

Control & manage concern on full-time basis

Good character - not debarred, suspended, parole or probation

Registered in Central Contractor Registration (CCR) database

Two (2) years business history in primary industry classification, as shown with tax returns (may sometimes be waived)

Business must be small per SBA’s size standards


Who is Socially and Economically

Disadvantaged? Socially disadvantaged persons have been subjected to racial or ethnic prejudice or cultural bias because of their identities as members of groups.

People are economically disadvantaged if their ability to compete in the free enterprise system has been impaired due to diminished access to capital and credit.


SBA will examine:Personal income for the past three yearsPersonal net worthFair market value of all assetsSpouse’s financial condition, in certain

circumstances

Determining Economic Disadvantage


Size for Primary NAICS Code

Firm must generally remain small. SBA may graduate a participant prior to the expiration of its program term if firm does not remain small, as adjusted, for three successive program years.


Joint Ventures: StructureRequirements tightened for joint ventures

(JV) so that non-disadvantaged firms do not unduly benefit from the 8(a) program

JV agreement may be informal or formal (separate business structure) but must be in writing

Can be unpopulated or populated (JV employs separate employees). Rules are different for each.


Joint Ventures: Awards vs. Contracts

Change from no more than 3 awards over a 2 year period to no more than 3 contracts over a 2 year period without a finding of general affiliation

Same two entities may form additional JVs and each may be awarded 3 contracts over 2 years


Reporting on Performance of Work

RequirementsAnnual Review: Participant must demonstrate

how it is meeting the performance of work requirements for each 8(a) contract that it is performing as part of a JV

8(a) Contract: At the completion of every 8(a) contract awarded to a JV, the Participant must explain how Performance of Work Requirements were met


Mentor Protégé Program

Non-profits can be Mentors Mentor can have up to 3 protégés at one timeA firm cannot be both a Protégé and a Mentor at

the same timeProtégé can have second Mentor, corresponding

to an unrelated, secondary NAICS code Assistance provided by the Mentor must be tied

to the Protégé’s SBA-approved business planSBA prohibited from approving a new

Mentor/Protégé relationship within six months of the end of an 8(a) Participant’s program term


Mentor/Protégé Agreement must be approved by SBA before the firms can submit a JV offer on a procurement as a small business

In order to receive the exclusion from affiliation on any non-8(a) contracts, the agreement must comply with all 8(a) JV requirements

SBA approved Mentor/Protégé joint ventures are small for federal subcontracts (DOE)

Contracting benefits derived from Mentor/Protégé relationship end once the protégé leaves the 8(a) program

Mentor Protégé Program


Failure to Provide AssistanceConsequences if Mentor does not provide agreed-to

assistance:SBA may terminate the Mentor/Protégé AgreementMentor is ineligible to participate for 2 yearsSBA may recommend a stop work order for each

contract the Mentor and Protégé are performing as a JV and where they have received the exclusion from affiliation

SBA may authorize substitution of protégé firm for the JV

May constitute grounds for Government-wide suspension or debarment


Self-Certified Contracting Programs

Small Disadvantaged Businesses (SDB)

Service-Disabled Veteran-Owned Businesses(SDVOB)

Women-Owned Small Businesses (WOSB)


Small Disadvantaged Business (SDB) Program

Self-certifying program as of October 2008

Subcontracting opportunities

SDBs are eligible for special bidding benefits

Prime contractors get credit towards

small business goals for using SDBs as subs


SDB Eligibility CriteriaSimilar to 8(a), except higher allowable Net

WorthAfter excluding the individual’s equity in the firm and equity in the primary residence, net worth may not exceed $750,000.*

Net Worth

less equity in primary residenceless equity in business equals adjusted net worth (which must not exceed $750,000 )

*when married, separate statements from each spouse to show each individual’s joint or community property shares and separate property.


Service-Disabled Veteran-Owned Business (SDVOB) Program

Self-certifying program

SDVOBs are eligible to bid on set-aside contracts

Subcontracting opportunities

Prime contractors get credit towards

small business goals for using SDVOBs as subs


SDVOB Program: Who is Eligible?

Size: Must be small according to SBA size standards Ownership: Must be at least 51% directly and

unconditionally owned and controlled by one or more service-disabled veteransDocumentation: Owner(s) must have rating letter from VA stating that they are rated as a service- related disabled veteran

Status: Owner(s) must have Form DD-214 indicating honorable discharge


Women-Owned Small Business (WOSB)Program

Final Rule Published October 2010Program Start February 2011

Firms self-certify as Women-Owned Small Businesses

(WOSB), or Economically-Disadvantaged Women-

Owned Small Businesses (EDWOSB)For 83 target industries where WOSBs are under-

represented, contract officers may set-aside contracts for WOSBs or EDWOSBs only (under

specific circumstances)


WOSB Program: Who is eligible?

Size: Must be small according to SBA size standards

Ownership: Must be at least 51% directly and unconditionally owned by a woman or women

Citizenship: Majority owner or owners must be U.S. citizens

Management: Control and day-to-day management must be in hands of a woman or women


WOSB Program: EDWOSB

An Economicallly-Disadvantaged Woman-Owned Small Business (EDWOSB) is a WOSB which is owned by a woman or women whose:

Personal Net Worth < $750,000

Average Annual Income < $350,000

Total Assets < $6,000,000 (including primary residence and business)


WOSB Program: Set-asidesI. RAND Study = 83 NAICS Codes:

45 NAICS Codes = Women-owned businesses “under-represented” Competition may be restricted to certified EDWOSBs

38 NAICS Codes = Women-owned businesses “substantially under-represented” Competition may be restricted to ALL CERTIFIED WOSBs

II. Award < $3 million ($5 million for manufacturing)

III. “Reasonable expectation” of two or more WOSBs or EDWOSBs bidding

IV. “Fair and reasonable” price


WOSB Program: CertificationSelf-Certification:• Register in CCR (Central Contractor Registration)

http://www.ccr.gov

• Enter data in ORCA (Online Representations and Certifications Application)

http://orca.bpn.gov

• Submit documents to SBA’s WOSB Program Repository See http://www.sba.gov/wosb for details

Third Party Certification:SBA is evaluating possible third-party certifiers. There are no third parties authorized to certify WOSBs at this time.


For More InformationContact your

Washington Metropolitan Area District Office:

www.sba.gov/dcor

202-272-0345

Washington Metropolitan Area District Office Growing your Contracting Opportunities.

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