U.S. Small Business Administration Helping small businesses to start, grow and succeed. Federal Contracting Certifications

Transcription

1 U.S. Small Business Administration Helping small businesses to start, grow and succeed. Federal Contracting Certifications 1

2 What is a Small Business? According to regulation (FAR ): Concern : Any business entity organized for profit with a place of business located in the U.S. Small business concern means a concern, including its affiliates, that is independently owned and operated, not dominant in the field of operation in which it is bidding on government contracts, and qualified as a small business under the criteria and size standards in 13 CFR Part

3 Size Size is determined either by: average 3 years revenues, or # of employees (manufacturers, dealers, wholesalers) See 13 CFR 121 Size Regulations or visit our website: 3

4 Federal Contracting Facts The world s largest buyer of goods and services is the Federal Government with purchases totaling more than $600 billion per year Contracts exist for every item imaginable from paper clips to armored tanks Federal agencies are required to establish contracting goals, with at least 23% of all government buying targeted to small firms SB $138B 2014 North Carolina s contracting: $49 billion 4

5 Federal Prime Contracting Procurement Goals Small Business (SB) - 23% Small Disadvantaged Business (SDB) - 5% Women-Owned Small Business - (WOSB)- 5% HUBZone Small Business 3% Service-Disabled Veteran-Owned SB (SDVOSB) - 3% 5

6 Small Business Program Parity 8(a) HUBZone Woman-Owned Service-Disabled Vet Small Business Unrestricted Competition Over $150,000 6

7 How the Government Buys <$3,000 usually purchased by credit card (micro-purchases No SB set-asides) >$3,000 - $150,000 set-aside for small business and simplified acquisition procedures. 8(a), HUBZone, SDVOSB and WOSB/EDWOSB SAs not precluded >$3,000 and <$25,000 must be displayed in a public place, or by any appropriate electronic means. >$25,000 - posted at FBO >$150,000 first consideration must be 8(a), HUBZone, SDVOSB, WOSB and EDWOSB (parity), then SBSA and lastly Unrestricted/Full and Open (F&O) (all businesses large and small may participate) 7

8 First Thing To Do Get Registered Know your NAICS Codes Are you small? 13 CFR 121 In order to be eligible for federal contracts, your business must be registered in the federal government s System for Award Management (SAM) database at (update at least annually) 8

9 Self-Certifications - Small Business (13 CFR121) - Small Disadvantage Business (13 CFR ) - Service Disabled Veteran-Owned Small Business (13 CFR 125) - Woman-Owned Small Business (13CFR 127) Formal Certification Programs - 8(a) Business Development (13 CFR124) - HUBZone (13 CFR126) Know the Federal Contract Certifications 9

10 Find Out If You Qualify for SBA Certifications 8(a) and HUBZone: Programs that Require Formal Certification (preapproval) by SBA Both programs provide eligibility for sole source: Up to $6.5M for (mfg) and Up to $4.0M for (non-mfg) 8(a) - Socially and economically disadvantaged firms enrolled in a 9-year business development program. Eligible to receive competitive and sole source contract awards HUBZone Location based program - Small businesses owned and controlled by US Citizens, community development corporations, or Indian tribes with principal office located in areas identified as historically underutilized business zones, and with 35% of employees residing in a HUBZone, are eligible to receive competitive and sole source awards.

11 SBA s 8(a) Program 11

12 Eligibility for 8(a) Program A small business US Citizen 51% owned and controlled by socially & economically disadvantaged individuals who are of good character Net worth below $250K (excludes the individual's equity in the firm and in the primary residence) Average Gross Income below $250K (3 Yrs) Total Assets below $4 M In business at least 2 years (to demonstrate potential for success) 9-year term - no renewals All 8(a) firms are SDBs CFR 124

13 8(a) Eligibility Criteria Socially disadvantaged: Are individuals who have been subjected to racial or ethnic prejudice or cultural bias because of their identities as members of groups, without regard to individual qualities. 13

14 8(a) Eligibility Criteria Individuals are presumed to be socially disadvantaged if they are a U.S. Citizen and a member of one of the following groups: Black American Asian Pacific American Hispanic American Native American Subcontinent Asian American Persons not members of a designated group Must establish a preponderance of evidence 14

15 8(a) Eligibility Criteria Entity-Owned Companies ANC Tribal NHO CDC 15

16 8(a) Eligibility Criteria Economically Disadvantaged: Individuals that are socially disadvantaged persons whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit. 16

17 8(a) Eligibility Criteria Adjusted Net Worth: After excluding the individual s equity in the firm, equity in the primary residence, and retirement funds that are not accessible without significant penalties, and individual s net worth may not exceed $250,000. Total Net Worth Less Equity in primary residence Less Equity in business Less IRA/Retirement Acct (Penalties) Equals Adjusted net worth (<$250,000) 17

18 Personal Income: 8(a) Eligibility Criteria An individual s adjusted gross income averaged over a 3 year period preceding the application date may not exceed $250,000. This excludes pass through income where there is evidence that it was reinvested in the firm. 18

19 8(a) Eligibility Criteria Total Assets: Including all exclusions, the individual s total assets may not exceed $4,000,

20 8(a) Eligibility Criteria Once in the 8(a) Program: Net Worth: $ 750,000 Total Assets: $6,000,000 Personal Income: $ 350,000 20

21 Good Character: 8(a) Eligibility Criteria What shows lack of good character? Adverse information regarding possible criminal conduct by the applicant or its principals. Violations of any SBA regulations. Debarred or suspended individuals or firms. Applicant firms and principals that lack business integrity as shown by an indictment, guilty plea or civil judgment. Any principal who is incarcerated or on parole or probation. Evidence that the firm knowingly submitted false information during the application process. Any firm or any of its principals that fail to pay financial obligations to the Federal Government. 21

22 Potential for Success Factors considered: 8(a) Eligibility Criteria Must be in business in its primary NAICS code for at least two full years immediately prior to the date of its 8(a) application. Proof of two years operation in the firm s primary industry as verified by revenues reported in business tax returns. Financial capability: sufficient capitalization, financial performance, bonding capacity, manageable debts. Managerial and Technical capability: performance on previous contracts, firm has the necessary personnel, licenses, certifications, facilities, prior experience. 22

23 8(a) Eligibility Criteria Potential for Success Continued: Management capability: Education, experience and training of CEO and other managers, magnitude and complexity of past/current jobs, management systems. Qualifications for ability to perform on Federal contracts: relevant contracting experience, ability to meet Federal procurement policies. 23

24 8(a) Eligibility Criteria Waiver of the Two Year Rule: SBA may waive the two-year rule if: The individual or individuals upon whom eligibility is to be based have substantial and demonstrated business management experience; The applicant has demonstrated technical expertise to carry out its business plan with a substantial likelihood for success if admitted to the 8(a) BD Program; The applicant has adequate capital to carry out its business plan as a Participant; 24

25 8(a) Eligibility Criteria Waiver of the Two Year Rule Continued: The applicant has a record of successful performance on contracts from governmental and nongovernmental sources in the primary industry category; The applicant has, or can demonstrate its ability to timely obtain the personnel, facilities, equipment, and any other requirements needed to perform such contracts as a Participant. 25

26 8(a) Eligibility Criteria Ownership: At least 51% unconditional ownership by the disadvantaged person(s). Partnerships: Agreements must reflect unconditional ownership. Limited Liability Company: Disadvantaged individuals must own at least 51% of each class of member interest. 26

27 8(a) Eligibility Criteria A Disadvantaged Individual must: Hold the position of President or Chief Executive Officer, Managing/ General Partner, or LLC Managing Member; Be physically located in the U.S.; Be the highest compensated individual; Have the ability to Hire and Fire; Set Policies; Have the ability to commit firm to contracts; Have the ability to the control Budget and Financial Disbursement; 27

28 8(a) Application Process SBA reviews application for completeness and notifies firm of deficiencies within 15 days. If incomplete, applicant submits corrections within 15 days and a determination of completeness is made by SBA within 10 days of receipt of firm s response. Applicant advised of outcome by the Associate Administrator within 90 days from the date completed application was accepted. If declined, applicant advised of right to request reconsideration within 45 days of date of decline. Should the concern not seek reconsideration, there is a mandatory 12 month waiting period before firm may reapply. 28

29 8(a) Application Process Ineligible Businesses and Individual Disqualification: Ineligible businesses: brokers*; debarred or suspended persons or concerns; nonprofit organizations. Franchises may be allowed contingent upon SBA review of the franchise agreement. A business may participate only once. Even if ownership and control has completely changed, firm may not re-apply. Any person who has used his/her disadvantaged status to qualify another firm shall be regarded as non-disadvantaged. * A broker is a concern that adds no material value to an item being supplied to procuring activity or which does not take ownership or possession of or handle the item being procured with its own equipment or facilities. 29

30 8(a) Application Process Applications for the 8(a)BD program are filed with the Division of Program Certification & Eligibility (DPCE) Unit that services the Federal Region where the 8(a) Participant is located- US Small Business Administration DPCE Central Office Duty Station Parkview Towers 1150 First Avenue 10th Floor, Suite 1001 King of Prussia, PA

31 8(a) Benefits Sole Source and Competitive set-asides Included in Federal SB goal of 23% Each firm is assigned a BOS Business Development assistance Small Business! Joint Ventures & Mentor-Protégé agreements 7j Training

32 SBA s HUBZone Program 32

33 33 HUBZone Requirements Historically Underutilized Business Zones, or HUBZones Requirements: Must be a small business by SBA size standards Concern must be 51% owned and controlled by US Citizens, Community Development Corporation or Indian Tribes The principal office must be located in a HUBZone (highunemployment, low-income areas in economically distressed communities, referred to as, to promote job growth, capital investment and economic development in these areas, including Indian reservations. At least 35% of the concerns employees must reside in any HUBZone To find out if your location is in a HUBZone, go to 13 CFR 126

34 HUBZone Program Applies to purchases over $3,000 Must be certified by SBA - no term limits Competitive and sole source set-aside program benefits Sole source: Up to $6.5M (mfg) and $4.0M (non-mfg) 10% price evaluation preference (on non set-asides) Principal office must be in a HUBZone 35% of employees must live in a HUBZone FAR

35 35 SDVOSB

36 Service-Disabled Veteran-Owned Small Businesses SDVOSB Set-Aside Buys over $3,000 Rule of Two No upward $ limit Can not consider if currently 8(a) requirement Sole Source Buys over $3,000 Only 1 Source Up to $6.0 M (mfg) Up to $3.5 M (non-mfg) Can not consider if currently 8(a) requirement 36

37 Service-Disabled Veteran- Owned Small Businesses Additional Points to Remember: Unique contracting opportunities with the Veteran Administration VetFirst SDVOSB VOSB PARITY VA determines Service Disability - SBA determines size, if protested No term limits no need to apply or reapply Competitive and sole-source program benefits Subcontracting and Prime Contracting goals FAR

38 WOSB/EDWOSB

39 WOSB Contracting Program q Meet small business size standard for primary NAICS code and contract q At least 51% unconditionally and directly owned by women who are U.S. citizens* q The woman must manage the day-to-day operations q The woman must make the long-term decisions for the business q A woman must hold highest officer position q The woman must work at the business full-time during normal working hours q No minimum amount of time the business has been operational 39

40 EDWOSB Same requirements as WOSBs PLUS: q Personal net worth (assets minus liabilities) is less than $750,000 excluding: Ownership in business and primary personal residence Income reinvested or used to pay taxes of business Funds reinvested in IRA or other retirement account* Transferred assets within two years if to or on behalf of immediate family member for select purposes** q Adjusted gross income average over three years is $350,000 or less excluding: Income reinvested or used to pay taxes of business 40 q Fair market value of assets is $6 million or less excluding: Funds reinvested in IRA or other official retirement account

41 WOSB Contracting Program Final Rule Establishes 83 Industries 4-digit NAICS Codes (373 six-digit NAICS Codes) EDWOSB 216 Underrepresented WOSB 157 Substantially Underrepresented digit NAICS codes List at: 22

42 WOSB Contracting Program The enactment of the National Defense Authorization Act (NDAA) for 2013 removed the caps on the contract award size for which WOSB and EDWOSB concerns have been able to compete The Women-Owned Small Business (WOSB) Federal Contract program authorizes contracting officers to set aside certain federal contracts for eligible WOSB/ EDWOSBs 42

43 Register in SAM (

44 To par(cipate in the 8(a), HubZone and WOSB programs, you must log into SBA' GLS account: Website: 44

45 How to Identify Contract Opportunities Federal Agency Procurement Forecasts: Home Pages/Small Business Information/ Business Opportunities/Procurement Forecast Federal Business Opportunities (FedBizOpps) (FBO) is the exclusive official source to identify federal contracts over $25,000 Increased use of Sources Sought Notices in the FBO Become familiar with and respond to these notices. Pay attention to what specifically the agency is asking for in the notice. Large contract awards and special notices - (e.g., procurement conferences) are also publicized in the FBO. 45

46 46

47 Subcontracting Opportunities SUB-Net USASpending.gov FPDS.gov Resources: FAR 19.7; 13 CFR

48 Explore Subcontracting Opportunities Prime contract winners often require subcontracts to fulfill their requirements (contracts > $650,000 and $1,500,000 for construction) The SBA/GC Subcontracting Opportunities Directory lists by state the large business federal prime contractors with the contact information for each Small Business Liaison Officer (SBLO). View the directory at: gc_subcontracts_opportunities.html 48 SBA s SUB-Net: Federal agencies, state and local governments, non-profit organizations, colleges and universities, and small businesses can use SUB-Net to post solicitations and notices. SUB-Net can be reached through the SBA s Home Page at Click on Search at the top of the page.

49 Learn Federal Contracting Procedures In order to win federal contracts, you will want/need to become familiar with federal regulations Federal Acquisition Regulations (FAR) Part 8.4 Federal Supply Schedules Part 13 Simplified Acquisitions Part 14 Sealed Bidding Part 15 Contracting by Negotiation Part 19 - Small Business Programs 49 Part 22 - Application of Labor Laws to Government Acquisitions Defense Federal Acquisition Regulation Supplement (DFARS) GSA s Regulations:

50 Market Your Company To effectively market your company s product or service: Identify your customers Research their requirements Learn federal procurement regulations Present your capabilities directly to the federal activities and large prime contractors that buy your products and services; PTAC Attend procurement conferences, business expos and business matchmaking events Add details to your SAM/Dynamic Small Business Search (DSBS) profile (e.g., GSA schedule number, commercial customers, federal customers, special capabilities). Show contracting officers that your company is a good match for their needs and requirements 50

51 Get to Know SBA s Website Take online federal procurement training classes to improve your company s ability to win federal prime and subcontracts. These classes are free of charge. Go to: On line training includes: Starting a Business Managing a Business Financing a Business Government Contracting 51

52 SBA Government Contracting Resources Go to Scroll down to Resources Section 52

53 Seek Help Additional Resources 53 Procurement Technical Assistance Centers (PTAC)- ; Small Business & Technology Development Center Small Business Center(SBC)- VBOC- Veterans Business Outreach Center Women s Business Centers (WBC) Fayetteville: Durham: SCORE - NCMBC-North Carolina Military Business- MatchForce- matches North Carolina businesses to government contracts, government purchasers to NC suppliers

54 Know the Regulations SBA size standards 13 CFR Part 121 HUBZone 13 CFR SBA Certificate of Competency 13 CFR Service-disabled veteran 13 CFR (a) BD 13 CFR 124 SDB 13 CFR (f) WOSB Program 13 CFR 127 SBA Prime Contracting 13 CFR125.2 SBA Subcontracting 13 CFR

55 7(a) SBAExpress Veteran s Advantage CAPLines MicroLoans Export Financing SBA Finance Programs NC Small Business Resource Guide Loans & Grants Small Business Jobs Act 504 Loan Disaster Loans SBICs SBIR/SBTTP Surety Bond Program 55

56 56 Joe Ann Shaeffers Business Opportunity Specialist North Carolina District Office 6302 Fairview Road, Suite 300 Charlotte NC