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Preparing your Small Business for the Federal Market

Presented by: Karen Williams, Certified Mentor, DC SCOREWebinar: April 2020

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With SCORE, You Are Not Alone on Your Journey

For over 50 years, SCORE has served as America’s premier source of free business mentoring and education.

As a resource partner of the U.S. Small Business Administration (SBA), SCORE has helped more than 11 million entrepreneurs through mentoring, workshops, and educational resources since 1964.

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SCORE Can Help You Find the Way Ahead

• Free one-on-one business counseling and mentoring

• Business advisory services

• Low cost local workshops

• Free templates and recorded webinars

To meet with a mentor or learn more about SCORE’s resources, visit washingtondc.score.org

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Session Objective – Part 1

• Develop an understanding of the reasons to consider selling to the Federal Government market

• Develop an understanding of the different types of Federal Government certifications

• Determine if you qualify

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Session Objective – Part 2 (on April 28th)

• Steps to Sell to the Government

• Market Research – how to do it; why is it important

• Subcontracting Strategies

• Next Steps – find out how to move forward

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Government Contracting

• The U.S. Government is the largest buyer in the world, outsourcing $400B - $500B annually on products and services

• 40% spent on products; 60% on services

• Less than 5% of the businesses in the United States do business with the U.S. Government

• Approximately $1 billion in new opportunities are available to be bid on by private businesses every day

• The Federal Government signs over 10 million contracts a year

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Government Contracting (cont.)

• Companies are awarded new contracts daily

• Approximately 95% of federal contracts are awarded to small and medium-sized businesses

• The U.S. Government procures everything from armored vehicles and cutting-edge scientific research, to paper clips and super computers

• A significant share of those contracts are specifically available for award to small businesses

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Federal Contracting – Is it for you?

• What a Government Contract can do for your business:

• Diversify your customer base

• Cover overhead/G&A costs

• Even out cash flow

• What a Government Contract cannot do for your business:

• Jump-start your business

• Save your business

• Be the sole source of your business (especially for start ups)

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Benefits of Contracting with the Federal Government

• You get paid regularly

• Your client won’t move away, run away, hide and/or not pay their bills - you will get paid!

• Government contracting allows businesses, many small and mid-sized businesses, to have a bevy of profitable, long-term contracts

• The high profile your company achieves as a result of Government contracts can be a good advertising tool for your firm

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Acronyms – Federal Contracting is filled with them!

• To enter the market, you must learn the language; a great reference: www.sba.gov

Contract

Register

SDB

code

systembeta.SAM.gov

services

industryabout all

small

work

DUNS

products

SAM

plan

need

person

receive

Find

contact

VOSB

understanding

responding

Opportunities

use

Representative

WOSB

agencies

opportunity

Determine

military

time

businesses

first

award

offer

Submit

termsContractor

contractors

each

specific

understand

negotiate

contracts

Labor

Past

strong

company

submissions

solicitationresponse

steps

T&M

idea

Ready

resources

whether

help

expect

Prepare

Onceservice

request

know

track

disadvantaged

FFP

within

through

review

proposal

GSAlearn

requirementscompete

Registration

best

sure

Search

CPFF

Make

contracting

including

GWACpricing

demand

Become

offers

different

listed

IDIQ

government

informationprocess

Tool

set-asidefederal

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SBA Small Business Certifications

Provided by SBA - For more information go to www.sba.gov

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Contracting Goals

PROCUREMENT TARGETS:Small Businesses: 23%

SDVOSB: 3%SDB: 5%

WOSB: 5%HUBZone: 3%

$500 Billion per year

U.S. Government: The World’s Largest Customer

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Small Business Prime and Subcontracting

• Prime contracting is where you have a direct contract with the Federal Government

• Subcontracting is where you have a contract with a Prime contractor

• Large Businesses may have small business subcontracting goals for large contracts – approximately $80 billion/year in opportunities

• SBA Procurement Center Representatives (PCRs) advocate for small businesses at buying activities, along with Agency’s Office of Small and Disadvantaged Business Utilization (OSDBU)

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What is a Small Business?

• The SBA defines a "small business" either in terms of the average number of employees over the past 12 months, or average annual receipts over the latest three fiscal years or five complete fiscal years. SBA defines a U.S. small business as a concern that:• Is organized for profit and has a place of business in the U.S.• Operates primarily within the U.S. or makes a significant contribution to the U.S.

economy through payment of taxes or use of American products, materials, or labor

• Is independently owned and operated and not dominant in its field on a national basis

• The business may be a sole proprietorship, partnership, corporation, or any other legal form. In determining what constitutes a small business, the definition will vary to reflect industry differences, such as size standards.

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SBA Size Standards

• Manufacturing 500 to 1,500 employees

• Non-manufacturers 500 employees

• Servicing $7.5 Million/ $38.5 Million

• Construction $7 Million/ $36.5 Million

• Agriculture $750,000/ $27.5 Million

Size Standards are based on NAICS (North American Industry Classification System) Codes

https://www.sba.gov/document/support--table-size-standards

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Types of Federal Contracting Certifications

• Self-Certified: • Small Businesses (SB)• Small Disadvantaged Businesses (SDB)• Service DisabledVeteran-Owned Small Businesses (SDVOSB)• Women-Owned Small Businesses (WOSB)*

*Certification process will change this summer• SBA-Certified:

• Historically Underutilized Business Zones (HUBZones) • 8(a) Business Development Program

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Small Disadvantaged Businesses (SDB) Eligibility Criteria

• Since October 2008, small businesses can self-represent their status as a small disadvantaged business (SDB)

• To self-represent as an SDB, register your business in the System for Award Management (SAM). SBA’s eligibility criteria for SDBs:• The firm must be 51% or more owned and controlled by one or more

disadvantaged persons• The disadvantaged person or persons must be socially disadvantaged

and economically disadvantaged• The firm must be small, according to SBA’s size standards

https://www.sba.gov/contracting/government-contracting-programs/small-disadvantaged-businesses

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Service-Disabled Veteran-Owned Small Business

• Must self-certify in SAM

• The Service-Disabled Veteran (SDV) must have a service-connected disability that has been determined by the Department of Veterans Affairs or Department of Defense

• The SDVOSB must be small under the NAICS code assigned to the procurement

• The SDV must unconditionally own 51% of the SDVOSBC

• The SDV must control the management and daily operations of the SDVOSB

https://www.sba.gov/contracting/government-contracting-programs/service-disabled-veteran-owned-businesses

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Service-Disabled Veteran-Owned Small Business (cont.)

• The SDV must hold the highest officer position in the SDVOSB

• The SDVOSB is eligible for Set Asides and Limited Sole Source opportunities

• For Department of Veterans Affairs (VA) procurements, firm must be certified by the VA

• Vets First Verification Program

• https://www.va.gov/osdbu/verification/

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Women-Owned Small Business Program

• Firm must meet the small business size standard for the contract and be at least 51% unconditionally and directly owned by women who are U.S. citizens

• Woman (or women) must manage the day-to-day operations on a full-time basis

• A woman must the hold highest officer position in the business

• Personal net worth (assets minus liabilities) is less than $750,000 for EDWOSB

https://www.sba.gov/sites/default/files/2020-04/SBA_WOSB_FAQ_508_v3.pdf

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Women-Owned Small Business Program (cont.)

• Set-asides and limited sole source awards are permitted

• The set aside or sole source procurement must be in the industries designated by SBA as underrepresented or substantially underrepresented. SBA has designated six-digit NAICS codes to denote the industries where WOSBs are underrepresented or substantially underrepresented. Current list of six-digit 2017 NAICS codes eligible for use under the WOSB Program may be viewed at the link below.

www.sba.gov/contracting/government-contracting-programs/women-owned-small-businesses

• 364 six-digit NAICS industries are WOSB eligible Industries and 80 six-digit NAICS industries are EDWOSB

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HUBZone

HUBZone - Historically Underutilized Business Zone

• Program is designed to stimulate economic development and create jobs in urban and rural communities

• HUBZones are defined by Census Tract or counties

• Map will not change until after 2020, then every 5 years thereafter

• HUBZone Map found on www.sba.gov

• Set asides and limited sole source for certified HUBZones

https://www.sba.gov/contracting/government-contracting-programs/hubzone-program

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HUBZone (cont.)

• Must be a small business for its primary NAICS code

• Owned and controlled at least 51% by U.S. citizens

• Principal office of the concern must be located in a HUBZone

• At least 35% of the concern’s employees must reside in a HUBZone; residency means to live in a primary residence for at least 180 days, or as a currently registered voter, and with intent to live there indefinitely

www.sba.gov/contracting/government-contracting-programs/hubzone-program/applying-hubzone-program

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8(a) Business Development Program

• Nine-year business development program

• Training in business management & marketing

• Access to set-aside contracting opportunities

• Sole Sourcing Direct Award Contracts

• U.S. citizen, own unconditionally at least 51% of concern

• Business must be small per SBA’s size standards

• Two (2) years in-business requirement (may sometimes be waived)

• Social and Economic Disadvantage requiredhttps://www.sba.gov/contracting/government-contracting-programs/8a-business-development-program/about-8a-business-development-program

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8(a) Eligibility Criteria

Economic Thresholds - Assets, Income, Net Worth• Before SBA can approve an application, the individual(s) claiming to be

disadvantaged must submit supporting documents to prove their assets, income, and net worth fall below certain threshold amounts. These include:• Assets cannot exceed $4 million• Personal income cannot exceed $250,000, averaged over 3 years• Adjusted net worth must be less than $250,000, excluding equity in

business, primary residence, and retirement account • 13 CFR 124.104

*When married, separate statements from each spouse are required to show each individual’s joint or community property shares and separate property - http://www.sba.gov/content/economic-disadvantage-eligibility

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For additional information please refer to: www.sba.gov/allsmallmpp

Applications now being accepted, via certify.sba.gov. for All Small/8(a), or through District Office for 8(a)

8(a) and All Small Mentor Protégé Program

Protégé Needs: Six categories1. Management &Technical

Assistance2. Financial3. Contracting4. Business Developing5. General/Administrative6. Trade Education

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Mentor Protégé Program Information

• Approved Mentor Protégés may joint venture and be considered small and bid using the socioeconomic status of the protégé

• Set aside or sole contracts, there are limitations on the amount that can be subcontracted

• Supply set aside or sole source contracts, prime must supply the product of a small business unless SBA has issued a waiver

https://www.sba.gov/federal-contracting/contracting-assistance-programs/all-small-mentor-protege-program

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SBA Certifications Handout

• The following handout provides a summary of all the Small Business Certifications:

https://www.sba.gov/sites/default/files/articles/Small%20Business%20Certifications.pdf

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Questions re Certifications?

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Contact our local Chapterfor more help

www.washingtondc.score.org

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