Growing your Contracting Opportunities

1. Growing your Contracting Opportunities

2. 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.”

3. What is a Small Business? Defined by number of firm’s employees OR Defined by firm’s annual revenues (Different for each industry, organized by NAICs code) Criteria can be found at: www.sba.gov/size

4. Federal Procurement U.S. Government: Federal Contracts = The World’s Largest Customer $440 Billion + per year (2009)

5. Federal Procurement PROCUREMENT TARGETS: Small Businesses: 23% $440 Billion + per year

6. Federal Procurement PROCUREMENT TARGETS: Small Businesses: 23% Service-Disabled Vets: 3% SDB: 5% $440 Billion + per year Women-owned: 5% HUBZone: 3%

7. U.S. Small Business Administration Washington Metropolitan Area District • District of Columbia • Montgomery County, MD • Prince George’s County, MD • Fairfax County, VA • Loudoun County, VA • Arlington County, VA • City of Fairfax, VA • City of Alexandria, VA

8. Federal contracting in the Washington Metropolitan Area District FY 2010: $73.7 billion in Federal contract dollars for work in District

9. 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

10. What part does the SBA play in procurement? 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

11. What part does the SBA play in procurement? 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

12. 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.

13. HUBZone Empowerment Contracting Program Designed to simulate economic development and create jobs in urban and rural communities. HUBZone = HistoricallyUnderutilizedBusinessZone

14. HUBZone Empowerment Contracting Program 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.

15. 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

16. 8(a) Business Development Program 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

17. First comprehensive revisions to 8(a) program in more than 10 years: effective 3/14/2011 • Technical and Substantive changes • Regulations now more consistent with existing and recent legislation • Reduce potential waste, fraud and abuse • Ensure program benefits flow to intended beneficiaries

18. 8(a) Business Development Program Program enrollment = 9 years Program participation divided into 2 stages: Year 1 – 4 Developmental Year 5 - 9 Transitional Must maintain eligibility throughout enrollment

19. Completion of Program Term A concern may leave the program by: • Expiration of the program term (Nine years) • Voluntary withdrawal or voluntary early graduation • Graduation (§ 124.302) • Early graduation (§§ 124.302 and 124.304) • Termination (§§ 124.303 and 124.304)

20. New Suspension Rule – For Military Service 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

21. 8(a) Eligibility   United 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      

22. 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.

23. Determining Economic Disadvantage SBA will examine: • Personal income for the past three years • Personal net worth • Fair market value of all assets • Spouse’s financial condition, in certain circumstances

24. 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.

25. Joint Ventures: Structure Requirements 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.

26. 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

27. Reporting on Performance of Work Requirements Annual 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

28. Mentor Protégé Program • Non-profits can be Mentors • Mentor can have up to 3 protégés at one time • A firm cannot be both a Protégé and a Mentor at the same time • Protégé 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 plan • SBA prohibited from approving a new Mentor/Protégé relationship within six months of the end of an 8(a) Participant’s program term

29. Mentor Protégé Program • 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

30. Failure to Provide Assistance Consequences if Mentor does not provide agreed-to assistance: • SBA may terminate the Mentor/Protégé Agreement • Mentor is ineligible to participate for 2 years • SBA 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

31. Self-Certified Contracting Programs Small Disadvantaged Businesses (SDB) Service-Disabled Veteran-Owned Businesses (SDVOB) Women-Owned Small Businesses (WOSB)

32. 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

33. SDB Eligibility Criteria Similar to 8(a), except higher allowable Net Worth After 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 residence less 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.

34. 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

35. 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 veterans Documentation: 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

36. Women-Owned Small Business (WOSB)Program Final Rule Published October 2010 Program 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)

37. Size: Must be small according to SBA size standards WOSB Program: Who is eligible? 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

38. 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: EDWOSB

39. I. 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: Set-asides

40. Self-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/wosbfor details • Third Party Certification: • SBA is evaluating possible third-party certifiers. There are no third parties authorized to certify WOSBs at this time. WOSB Program: Certification

41. For More Information Contact your Washington Metropolitan Area District Office: www.sba.gov/dc or 202-272-0345