DoingBusiness2.0 Presentation: SBA Business Development & Contracting Programs

Washington Metropolitan Area District Office

SBA’s Business Development

and Contracting Programs


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.”


Federal Procurement

$500 Billion $500 Billion ++

per yearper year

U.S. Government:

The World’s Largest

Customer

Federal Federal Contracts =Contracts =


Federal Procurement

Small Businesses: 23%

Service-Disabled Vets: 3%

SDB: 5%

Women-owned: 5%

HUBZone: 3%

PROCUREMENT TARGETS:

$500 Billion $500 Billion ++

per yearper 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


What part does the SBA playin 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.

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

Resource Partners include: SCORE, SBDC, WBC.



3. Certification

SBA-Certified:

HUBZone Empowerment Contracting Program

8(a) Business Development Program

Self-Certified:

Small Disadvantaged Business

Service Disabled Veteran-Owned Business

Women-Owned Small Business



SBA-Certified Contracting Programs




HUBZoneEmpowerment Contracting Program 13CFR Part 126

Designed to stimulate economic

development and create jobs in urban and

rural communities.

HUBZone = Historically Underutilized Business

Zone



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

Set-aside awards based on competition restricted to qualified HUBZone SBCs.

Awards to qualified HUBZone firms through full and open competition after a price evaluation preference in favor of qualified HUBZone SBCs (10%, where price is considered an evaluation factor).


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


8(a) Business Development Program 13CFR Part 124

Helps eligible small socially and economically disadvantaged businesses

grow and become sustainable.

Training in business management & marketing

Opportunities to team with other companies


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 System for Award Management (SAM) 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 they are socially disadvantaged and 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


Program enrollment = 9 years

Program participation divided into 2 stages:Year 1 – 4 Developmental

Year 5 - 9 Transitional

Must maintain eligibility throughout enrollment



New Suspension RuleFor 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.(13 CFR 124.305)

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) assumes control of the firm


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.


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


Completion of Program Term

A concern may leave the program by:

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

graduationGraduation (13 CFR 124.302)Early graduation (13 CFR 124.302 and 304)Termination (13 CFR 124.303 and 304)


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.


Joint Ventures:

Generally may not be awarded more than three contracts over a two year period, starting from the date of the award of the first contract, without the partners to the JV being deemed affiliated for all purposes. (13 CFR 121.103)

Same entities may create additional JVs and each new joint venture entity may be awarded up to 3 contracts.


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 8(a) or non-8(a) contracts, the agreement must comply with all 8(a) JV requirements

SBA approved Mentor/Protégé joint ventures are small for federal contracts

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

Mentor Protégé Program


Failure to Provide Assistance

Consequences 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 JVMay 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 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.


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 standards

Ownership: Must be at least 51% directly and unconditionally controlled by one or more service disabled veterans

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


Women-Owned Small Business (WOSB)Program 13CFR Part 127

Program Started February 2011

Firms self-certify as Women-Owned Small Businesses

(WOSB), or Economically-Disadvantaged Women-

Owned Small Businesses (EDWOSB)For 83 target industries (NAICS codes) 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 (preceding 3 year average)

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


WOSB Program: Set-asidesI. RAND Study (2007) = 83 Designated 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: Certification

Self-Certification:•Register and enter data in SAM (System for Award Management) www.sam.gov

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

Third Party Certification:SBA has approved several third-party certifiers.


For More InformationFor More InformationContact your

Washington Metropolitan Area District Office:

www.sba.gov/dcor

202-205-8800

DoingBusiness2.0 Presentation: SBA Business Development & Contracting Programs

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Transcript of DoingBusiness2.0 Presentation: SBA Business Development & Contracting Programs