1. Center for Workforce & Community
Education
Government Contracting
Seminar
Kris Parker & Pat Canciglia
(540) 653-4806
(540) 653-7958 Distribution Statement A:
Approved for Public Release;
Approved for Public Release Distribution is Unlimited
1
09 June 2011
3. Brief SB Program History
• Began as a response to WWII needs
• Small Business Mobilization Act of 1942 – Response by
Congress to help small plants compete with larger ones.
– Act authorized a price premium to be paid in contracting with
small firms
– Applicable only during wartime
• Armed Services Production Act of 1947 – provided that “…a
fair proportion of total Federal purchases and contracts be
placed with Small Business concerns…”
– Act extended provisions of the SB Mobilization act to peacetime
• Defense Production Act of 1950 – provided that awards could
be made to small businesses at other than the lowest
possible price
• Small Business Act of 1953 – Created the Small Business
Administration (SBA) as and independent agency of the
Executive Branch
– The Government should aid, counsel, assist, and protect, insofar
as possible, the interests of small business concerns to…ensure
that a fair proportion of the total purchases be place with small
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4. What is a Small Business?
• A concern that:
– Is FOR Profit
– Is independently owned and operated
– Is not dominant in the field of operation in which it is bidding on
Government Contracts
– Can qualify under the size standards
• Size Standards:
– Established by U.S. Small Business Administration (SBA) on an industry-
by-industry basis using North American Industry Classification System
(NAICS) codes
– Size standards are based on:
• For manufacturing, number of employees
• For services and construction, average annual receipts for three
preceding accounting years
• Example: NAICS 541330, Engineering Services, size standard is $27
million
• Federal Small Business concerns differ from
state/local
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5. Small Business Preference
• Federal Acquisition Regulations
Provide:
– Set Asides
– Sole Source/Direct Award (for certain
concerns)
– Mandatory % of $ to Small Business
– Subcontracting requirements
– Most provisions detailed in FAR 19
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6. Small Business Programs
Conventional Small Business
Small Woman-Owned
Disadvantaged Small Business
Business (WOSB)
(SDB)
Veteran-Owned
Section 8(a) Small Business
(VOSB)
Minority Institutions
Service-Disabled VOSB
(SDVOSB)
HUBZone
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7. SDB
• Small Disadvantaged Business (SDB)
– Small Business 51% owned and operated by socially and
economically disadvantaged individuals
– 8(a) Business Development Program is a Subset of SBD
– As of 01 October 2008, Standard SDB criteria is a Self-
Certifying criteria
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8. The 8(a) Program
• Section 8(a) of the Small Business Act established a Business
Development Program for SDBs
– An 8(a) SDB can be in the program for up to 9 years
• Exception: Native Alaskan and American Indian firms never
graduate
• 8(a) provisions allow for set-aside and sole source efforts
• 8(a) firms can receive direct, sole-source awards up to
following thresholds;
– Manufacturing: $6.5 million (Increased from $5.5 million)
– Services: $4.0 million (Increased from $3.5 million)
– 8(a) competition normally used above these levels
• Exception: Native Alaskan/American Indian firms – no ceiling
• SBA is legally the prime contractor for 8(a) contracts; however, DoD
activities execute contracts for the SBA under special partnership
agreements
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9. The 8(a) Program
• DoD/Navy Policy: once 8(a), always 8(a)
– Assuming no material change to a requirement, a
graduated firm may no longer be able to compete for the
work it performed
• 8(a) Status requires SBA Certification
• IMPORTANT TO NOTE
– 8(a) Status must be valid at time of Contract Award for
Sole Source Efforts
– 8(a) Status must be valid at time of Proposal Submission
for 8(a) Competitive Set-Asides
– 13 CFR § 124
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10. The 8(a) Program
• Recent Regulatory Updates enacted
by the SBA effective 14 March 2011
• Changes include:
– Clarification on factors determining
economic disadvantage
– Increased reporting requirements for
Tribally-owned firms
– New Ownership and Control
Requirements
– Suspension for call-ups to active duty
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11. WOSB/EDWOSB
• Women-Owned Small Business
– Small Business Reauthorization Act of 2000 set stage for
WOSB Set-Asides
– Criteria Divided in two categories:
• Woman Owned Small Business (WOSB)
• Economically Disadvantaged Woman Owned Small Business
(EDWOSB)
– WOSB & EDWOSB Small Business concerns must be 51%
owned and operated by one or more women
– Current regulations effective 04 February 2011
– New FAR Clause 19.15 recently included to provide
guidance
– NO SOLE SOURCE Provisions
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12. WOSB/EDWOSB
• Women-Owned Small Business
– Current Proposal Allows for WOSB Set-Asides as of 04
February 2011
• Manufacturing: $6.5 million
• All Others: $4.0 million
– Set-Asides Eligible ONLY for 83 Designated NAICS Codes
• 45 Determined to be Underrepresented
• 38 Determined to be Substantially Underrepresented
– WOSB is a Self-Certifying Criteria
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13. VOSB/SDVOSB
• Veteran-Owned Small Business
– Small Business 51% owned and operated by one or more
veterans
– Veterans Administration is the only Federal Agency with
VOSB Set-Aside authority
• Service-disabled VOSB (SDVOSB)
– SDVOSB provisions allow for set-aside and sole source
efforts
– Subset of VOSB can receive direct (sole-source) awards
up to following thresholds;
• Manufacturing: $6.0 million (Increased from $5.5 million)
• Services: $3.5 million (Increased from $3.0 million)
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14. VOSB/SDVOSB
• For SDVOSB sole source efforts:
– Contracting Officer must determine that there is
only one qualified SDVOSB available
• The effort must not be currently performed
by an 8(a) Small Business
• Both VOSB & SDVOSB are Self-Certifying
concerns
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15. HUBZone
• HUBZone Small Business
• HUBZone provisions allow for set-aside and sole source
efforts
• HUBZone firms can receive direct, sole-source awards up to
following thresholds;
– Manufacturing: $6.5 million (Increased from $5.5 million)
– Services: $4.0 million (Increased from $3.5 million)
– Purchases must be >$150k for sole source provisions to be
exercised
• For HUBZone sole source efforts:
– Contracting Officer must determine that there is only one
qualified HUBZone available
• The effort must not be currently performed by an 8(a) Small
Business
• HUBZone Status requires SBA Certification
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16. HUBZone
• IMPORTANT TO NOTE
– HUBZone Status must be valid at time of Proposal
Submission and Contract Award
– HUBZone Mapping to be updated later this year
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17. Small Business Jobs Act
• Public Law 111-240, singed into effort 27
September 2010
• Officially restored “Parity”
– Removed “Shall” from HUBZone verbiage and
replaced it with “May”
• Established Government-wide policy on
Bundling
• Calls for annual Size Standard Certification
• Significant federal financial investments and
tax incentives for Small Business
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18. Accelerated Payment
• Interim Rule effective 27 April 2011
• Modifies DFAR & Associated Payment
Systems to make Accelerated Payment to
ALL Small Business
• Removes the term “Disadvantaged” from
the DFAR Verbiage
• Current FPDS data reflects approx. 60,000
active Small Business contracts
• Targeted payment date of 7-10 days
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19. Set-Aside Considerations
• All procurements between $3k and $150K
automatically SB Set-Asides (FAR 19.502-2)
• Procurements >$150K shall be set-aside if two
or more qualified small businesses available
• Repetitive procurements should follow suit
unless market research indicated otherwise,
e.g., an 8(a) set-aside is re-procured as 8(a),
etc.
• Help us help you!
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20. Sole Source Considerations
• Governed by FAR 6.3
• Very high scrutiny
• Only concerns w/Sole Source provisions:
– 8(a)
– SDVOSB
– HUBZone
• Local Sole Source Signature Authority to
$12.5m
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21. Fundamental Thoughts
• LEAD with your Capabilities –
LEVERAGE your Concern
• Know your Market
– Internal – Be familiar with the target
ordering office
– External – Know your competition
• Focus your talents
• Have a future plan with contingencies
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22. Policy Trend:
Better Buying Power
“Better Buying Power” - USD(AT&L) memo of 14Sep10
-- Dr. Carter outlined his acquisition initiatives to deliver better value to the
taxpayer and our warfighters. They were organized under these topics:
1. Target Affordability and Control Cost Growth
2. Incentivize Productivity and Innovation in Industry
3. Promote Real Competition
4. Improve Tradecraft in Service Acquisitions
5. Reduce Non-Productive Processes and Bureaucracy
“Implementation Directive for Better Buying Power (USD(AT&L) memo
03Nov10)
-- Directs implementation of specific actions with regard to the five initiatives
above.
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23. Specific Direction Affecting
Small Business
• Reinvigorate Industry IR&D/Protect DoD
Technology Base
– Enhance SBIR Program to Promote Role of Small
Business in Supporting DoD IRAD Needs
• Increase Dynamic Small Business Role in
DoD Marketplace Competition
– For All Competitive and Non-Competitive
Procurements, Seek Increased SB Participation
Through Weighting Factors in Past Performance
and in Fee Construct
• Increase Small Business Participation in
Providing Services
– Seek Opportunities to Compete Multiple-Award
ID/IQ Contracts Among Small Businesses
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24. Competition & Small Business
Opportunity at Dahlgren
• SeaPort Pre-Solicitation Announcements
- Have become a practice at NSWCDD Contracts
- Announcements allow companies more time to
prepare for the upcoming effort
• SeaPort Sources Sought Announcements
- Posted whenever practicable
- Provide every opportunity for Small Business
participation
• Industry Days
• Highly encouraging early involvement with
Program Managers and Industry Partners
• Acquisition Planning
• Early identification of follow-on efforts;
concurrent with final option exercise
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25. FY 2010 Contracting for
NSWCDD Departments
Dollars Obligated Contract Actions
17%
46%
54%
83%
Services
Supplies
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26. FY 2010 Obligations - Top 10 FSC Groups ($000)
$180,000
Thousands
$160,000
Top Ten FSC’s
$140,000 Account for 90% of
Obligations
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$-
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28. WORK PRODUCT METRICS
(NSWCDD)
*DATA INCLUDES CDSA, OTHER NASP TENANTS, PURCHASE CARDS, GRANTS AND OTHER TRANSACTIONS
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