Exceeding Your Goals. Thinking Over Bundled and Consolidated Contracts.

Transcription

1 Exceeding Your Goals Thinking Over Bundled and Consolidated Contracts Janis Kaiser, Procurement Center Representative SBA Office of Government Contracting, Area IV, Chicago

2 Procurement Center Representative (PCR) link: Janis Kaiser, PCR SBA Office of Government Contracting, Area IV, Chicago (312) Valerie Coleman, PCR SBA Office of Government Contracting, Area V, Houston or Dwight A. Johnson, PCR SBA Office of Government Contracting, Area IV, Omaha (402)

3 SBA Area Directors, Office of Government Contracting ( 1. Size protests FAR Part SBA staff FAR Part Certificates of Competency FAR Part Subcontracting plans FAR Part 19.7 Reminders: 1. Use the correct NAICS codes for Women-Owned Small Business set-asides by checking 2. SBA only approves 8(a) JV agreements at this time. Do not state in your solicitation that a JV or teaming agreement must be approved by SBA.

4 Welcome to SBA Virtual Learning Answering questions begins during the final 10 minutes. Or contact 2. Technical problems? Contact the moderator with a note or call AT&T Connect Support at We state page numbers for those working of hard copies of the program. 4. We cover the SBA Quick Reference as time allows. 5. Participation is limited to federal acquisition and related staff, SBA, and Procurement Technical Assistance Center (PTAC) staff. Your nearest PTAC: (

5 FY 2016 Topic Presenters SBA Area 1 October 7, (a) Business Jackquline Development Robinson-Burnette HDQTRS 2 November 4, 2015 Women-Owned Small Business Ken Silvia III 3 December 2, 2015 SBA Surveillance Reviews 2016 Valerie Coleman V 4 January 6, 2016 Consolidation/Bundling Jan Kaiser IV 5 February 3, 2016 SDVOSB Keith Waye I 6 March 2, 2016 Partial SB Set-Asides Jan Kaiser IV 7 April 6, FIRST WEDNESDAY VIRTUAL LEARNING SERIES :30 to 10:30 Central Time Market Research: Dynamic Small Bus Search Valerie Coleman 8 May 4, 2016 HUBZones Mariana Pardo HDQTRS 9 June 1, 2016 SBA Size Standards David Gordon IV 10 July 13, 2016 Nonmanufacturer Rule Janice Nietes VI V 11 August 3, 2016 SBA Subcontracting Assistance (CMRS) Stephanie Lewis V 12 August 17, 2016 Special TBD: Limitations TBD on Subcontracting HDQTRS

6 One Continuous Learning Point Self-service: Fill in your name on the certificate slide and save. Phoning in only? Send an immediately to to verify your participation. If you listen in groups, send s fo participants in an excel document. Post program . This contains a time sensitive.wmv recording, a transcript of the program, along with another copy of the program PowerPoint. Welcome and thank-you for your support of small business.

7 Exceeding Your Goals Thinking Over Bundled and Consolidated Contracts Janis Kaiser, Procurement Center Representative SBA Office of Government Contracting, Area IV, Chicago

8 Definitions, FAR Contract Contract means a mutually binding legal relationship obligating the seller to furnish the supplies or services (including construction) and the buyer to pay for them. It includes all types of commitments that obligate the Government to an expenditure of appropriated funds. In addition to bilateral instruments, contracts include.job orders or task letters issued under basic ordering agreements; letter contracts; orders, such as purchase orders, under which the contract becomes effective by written acceptance or performance; and bilateral contract modifications. For discussion of various types of contracts, see Part 16.

9 13 CFR Definitions of consolidation (c) Consolidation of contract requirements, consolidated contract, or consolidated requirement means a solicitation for a single contract or a Multiple Award Contract to: (1) Satisfy two or more requirements of the Federal agency for goods or services that have been provided to or performed for the Federal agency under two or more separate contracts each of which was lower in cost than the total cost of the contract for which the offers are solicited, the total cost of which exceeds $2 million (including options); or (2) Satisfy requirements of the Federal agency for construction projects to be performed at two or more discrete sites.

10 Contract Consolidation is: Small business may still compete on a consolidated contract

11 Bundled and consolidated contracts Bundled contracts are a subset of consolidated contracts: All bundled contracts are consolidated contracts. Consolidated contracts Bundled contracts

12 Definitions, FAR Bundling 12 (1) Consolidating two or more requirements for supplies or services, previously provided or performed under separate smaller contracts, into a solicitation for a single contract that is likely to be unsuitable for award to a small business concern due to- (i) The diversity, size, or specialized nature of the elements of the performance specified; (ii) The aggregate dollar value of the anticipated award; (iii) The geographical dispersion of the contract performance sites; or (iv) Any combination of the factors described in paragraphs (1)(i), (ii), and (iii) of this definition.

13 Definitions, FAR Bundling, 13 continued (2) Separate smaller contract as used in this definition, means a contract that has been performed by one or more small business concerns or that was suitable for award to one or more small business concerns. (3) Single contract as used in this definition, includes- (i) Multiple awards of indefinite-quantity contracts under a single solicitation for the same or similar supplies or services to two or more sources (see FAR (c)); and (ii) An order placed against an indefinite quantity contract under a- (A) Federal Supply Schedule contract; or (B) Task-order contract or delivery-order contract awarded by another agency (i.e., Government wide acquisition contract or multi-agency contract). (4) This definition does not apply to a contract that will be awarded and performed entirely outside of the United States.

14 Contract Bundling is: Small business unlikely to be able to compete on a bundled contract

15 Structuring the Requirement 15 Acquisition planners, to the maximum extent practicable, shall (1) Structure contract requirements to facilitate competition by and among small business concerns; and (2) Avoid unnecessary and unjustified bundling that precludes small business participation as contractors FAR 7.103(u)

16 Market Research 16 If an agency contemplates awarding a bundled contract, the agency should consult with the local Small Business Administration (SBA) procurement center representative (PCR). If a PCR is not assigned, contact the SBA Office of Government Contracting Area Office serving the area in which the procuring office is located. The PCR directory is at: FAR (c)(1)

17 Market Research (cont d) 17 Conduct market research to determine whether bundling is necessary and justified. Market research may indicate that bundling is necessary and justified if an agency or the Government would derive measurably substantial benefits FAR 7.107(a) and 15 U.S.C. 644(e)(2)

18 Benefit Analysis 18 The contracting officer must justify bundling in acquisition strategy documentation. In assessing whether cost savings would be achieved through bundling, the contracting officer must consider the cost that has been charged or, where data is available, could be charged by small business concerns for the same or similar work.

19 Benefit Analysis 19 Without power of delegation, the service acquisition executive for the military departments, USD(AT&L) for DoD, or the Deputy Secretary or equivalent for the civilian agencies may determine that bundling is necessary and justified when (1) The expected benefits do not meet the thresholds of measurably substantial but are critical to the agency s mission success; AND (2) The acquisition strategy provides for maximum practicable participation by small business concerns. FAR 7.107(c)

20 Benefit Analysis 20 The agency must quantify the identified benefits and explain how their impact would be measurably substantial. Reduction of administrative or personnel costs alone is not sufficient justification for bundling unless the cost savings are expected to be at least 10 percent of the estimated contract or order value (including options) of the bundled requirements. FAR 7.107(b) and (d)

21 Bundling and consolidation may provide substantial benefits to the Government. However, because of the potential impact on small business participation, market research must be conducted to determine whether bundling is necessary and justified. Market research may indicate that bundling is necessary and justified if an agency or the Government would derive measurably substantial benefits.

22 Measurably Substantial Benefits 22 Measurably substantial benefits may include, individually or in any combination or aggregate, cost savings or price reduction, quality improvements that will save time or improve or enhance performance or efficiency, reduction in acquisition cycle times, better terms and conditions, and any other benefits. FAR 7.107(b)

23 Measurably Substantial Benefits (cont d) The agency may determine bundling (and consolidation) to be necessary and justified if, as compared to not bundled, it would derive measurably substantial benefits equivalent to If value is greater than $94M (including options), then benefits must be at least 5% of estimated contract If value is $94M or less (including options), cost savings must be at least 10% of estimated contract value FAR 7.107(b) and 13 CFR 125.2(d)

24 Substantial Bundling 24 The Benefit Analysis in the AQ Strategy is much more detailed when it involves Substantial Bundling. That is if the estimated contract or order value is (A) $8 million or more for the Department of Defense; (B) $6 million or more for the National Aeronautics and Space Administration, the General Services Administration, and the Department of Energy; and (C) $2.5 million or more for all other agencies. FAR 7.107(e)

25 Acquisition Strategy 25 The small business specialist shall notify the agency Office of Small and Disadvantaged Business Utilization if the strategy involves contract bundling that is unnecessary, unjustified, or not identified as bundled by the agency. If the strategy involves substantial bundling, the small business specialist shall assist in identifying alternative strategies that would reduce or minimize the scope of the bundling.

26 Acquisition Plan The planner shall coordinate the acquisition plan or strategy with the cognizant small business specialist when the strategy contemplates an acquisition meeting the dollar amounts for substantial bundling unless the contract or order is entirely reserved or set-aside for small business under Part 19. It remains a consolidated contract.

27 Prior to Release of the Solicitation 27 AT least 30 days before release of the solicitation or 30 days prior to placing an order without a solicitation the KO -- (i) Must notify any affected incumbent small business concerns of the Government s intention to bundle the requirement; and (ii) Should notify any affected incumbent small business concerns of how the concerns may contact the appropriate Small Business Administration representative. FAR (c)(2)

28 Prior to Release of the Solicitation Provide a copy of the proposed acquisition package to the SBA procurement center representative at least 30 days prior to the issuance of the solicitation if (i) The proposed acquisition is for supplies or services currently being provided by a small business and the proposed acquisition is of a quantity or estimated dollar value, the magnitude of which makes it unlikely that small businesses can compete for the prime contract; (ii) The proposed acquisition is for construction and seeks to package or consolidate discrete construction projects and the magnitude of this consolidation makes it unlikely that small businesses can compete for the prime contract. FAR (e)

29 Prior to Release of the Solicitation 29 The proposed acquisition is for a bundled requirement. The contracting officer shall provide all information relative to the justification of contract bundling, including the acquisition plan or strategy, and if the acquisition involves substantial bundling, the information identified in 7.107(e). When the acquisition involves substantial bundling, the contracting officer shall also provide the same information to the agency Office of Small and Disadvantaged Business Utilization. FAR (e)

30 Bundling Acquisition Documentation 30 The contracting officer also must provide a statement to the SBA explaining why the -- (i) Proposed acquisition cannot be divided into reasonably small lots to permit offers on quantities less than the total requirement; (ii) Delivery schedules cannot be established on a realistic basis that will encourage small business participation to the extent consistent with the actual requirements of the Government; FAR (e)

31 Bundling Acquisition Documentation 31 (iii) Proposed acquisition cannot be structured so as to make it likely that small businesses can compete for the prime contract; (iv) Consolidated construction project cannot be acquired as separate discrete projects; or (v) Bundling is necessary and justified. FAR (e)

32 Required Information for SBA Regarding Recompetes of Consolidated or Bundled Contracts SBA information required. 13 CFR (b)(i)(e) PCRs will review whether, for bundled and consolidated contracts that are recompeted to see that: The amount of savings (5% or 10%) and benefits was achieved under the prior bundling or consolidation of contract requirements, That such savings and benefits will continue to be realized if the contract remains bundled or consolidated, or Such savings and benefits would be greater if the procurement requirements were divided into separate solicitations suitable for award to small business concerns. Provide the previous bundling/consolidation memoranda

33 SBA Review SBA has 15 days after receipt of the Acquisition Package to make a recommendation.

34 Rejection of SBA Recommendation 34 If the contracting officer rejects the SBA representative s recommendation, the contracting officer shall document the basis for the rejection and notify the SBA representative in accordance with SBA Form 70

35 Consolidated and Bundled Contracts and Source Selection For BUNDLING, factors are to be included measuring Small business participation Past performance in subcontracting FAR Case adds this requirement for consolidations and is in line for publishing in the FAR. Otherwise, refer to 13 CFR and Dated reference: book.pdf

36 Proposed Changes 36 June 3, 2015 Federal Register proposed rule on Consolidation and Bundling of Contract Requirements (Bundling Rule) Revises the definition of bundling and adds a new definition for consolidation, consolidation of contract requirements, consolidated contract, or consolidated requirement Addresses the consolidation of construction requirements

37 Proposed Changes (cont d) 37 Adds a definition for small business teaming arrangement Clarifies that agencies are to ensure that unnecessary and unjustified consolidation is avoided Clarifies that small business is to be a discipline that is represented in the acquisition planning team Clarifies that if a requirement is considered both consolidated and bundled, the agency must follow the guidance regarding bundling

38 38

39 Dynamic Small Business Search Dynamic Small Business Search is alive and well. Link:

40 Summary of CFR regulations SBA size regulations 13 CFR Part 121 HUBZone regulations 13 CFR SBA Certificate of Competency 13 CFR Service-disabled veteran 13 CFR (b) 8(a) and SDB regulations 13 CFR Small disadvantaged business 13 CFR (f) WOSB Program 13 CFR 127 SBA Prime Contracting 13 CFR SBA Subcontracting 13 CFR 125.3

41 41 FIVE TYPES OF SBA CONTACTS & OFFICES A. SBA Government Contracting Area Offices B. SBA Procurement Center Representatives (PCRs) C. SBA Commercial Market Representatives (CMRs) D. SBA District Offices E. SBA Headquarters

42 Six SBA Government Contracting Areas at

43 A. SBA Quick Reference - SBA Area Offices 1. Size protests (with recertification) FAR CFR CFR Locating nearest SBA staffer FAR Certificate of Competency FAR CFR COC Limitations on Subcontracting Compliance FAR CFR 125.6(f) 5. Receiving copies subcontracting plans FAR

44 B. SBA Quick Reference SBA Procurement Center Representatives (PCRs) FAR Small Business Administration procurement center representatives. (a)(1) The SBA may assign one or more procurement center representatives to any contracting activity or contract administration office to carry out SBA policies and programs (2) If a SBA procurement center representative is not assigned to the procuring activity or contract administration office, contact the SBA Office of Government Contracting Area Office.. (b) Upon their request and subject to applicable acquisition and security regulations, contracting officers shall give SBA procurement center representatives.access to all reasonably obtainable contract.

45 B. SBA Quick Reference SBA PCRs, cont SBA PCR coordination records FAR (b) 13 CFR Small business set-aside appeals FAR CFR 125.2(b)(7) 3. HUBZone set-aside appeals FAR FAR CFR SDVOSB set-aside appeal FAR FAR CFR Reporting bundling to SBA (MATOCs) FAR (e)(1) 13 CFR SBA subcontracting plan reviews-copies FAR (3) 13 CFR 125.2(b)(6)(iii) FAR (c) 1/21/2016 1:32 PM 13 CFR 125.2(b)(6)(iii)(C) 7. SBA subcontracting program review FAR (4) 13 CFR 125.2(b)(6)(iii)(C) 8. Small business TFD FAR (e)(4)) (Termination for default) 9. Surveillance review of agency contracting

46 Small business coordination forms sent to SBA PCRs Agency Form Title 1 Commerce CD 570 Small business set-aside review 2 Defense 2579 Small business coordination record 3 Energy Small Business Review form 4 GSA 2689 Small Business Analysis Record 5 HHS 653 Small business review form 6 Homeland Security Small business review form 7 Interior 1886 Acquisition screening and review form 8 Labor DL Small Business Procurement Determination. 9 NASA NF 1787 Small business review sheet 10 State DS-1910 Small Business Clearance Form 11 Transportation 4250 Small Business Program Review Form 12 USDA AD VA 2268 Small Business Program Procurement Review Procurement Request Review For 46 Small Business

47 Document that you have provided SBA Area Directors with copies of subcontracting plans Postaward responsibilities of the contracting officer. : (a) Notifying the SBA of the award by sending a copy of the award document to the Area Director, Office of Government Contracting, in the SBA area office where the contract will be performed. (c) Giving to the SBA procurement center representative.a copy of (1) Any subcontracting plan submitted in response to a sealed bid solicitation; and (2) The final negotiated subcontracting plan that was incorporated into a negotiated contract or contract modification. (d) Notifying the SBA procurement center representative. of the opportunity to review subcontracting plans in connection with contract modifications.

48 C. SBA Quick Reference - SBA Commercial Market Representatives (CMRs) link: ( 1. Prime contractor portfolio management 13 CFR Reviews of subcontracting plan holders 13 CFR Matchmaking 13 CFR SBA SUB-Net link: 5. SBA Subcontracting Opportunities Directory link: 6. SBLO Handbook link:

49 D. SBA Quick Reference SBA Regional and District Offices Link to district offices:

50 D. SBA Quick Reference - SBA District Offices, cont. To locate SBA 8(a) servicing office, check Dynamic Small Business Search at the link: and then local resources at the link

51 E. SBA Quick Reference - SBA Headquarters 1. HUBZone status protests FAR CFR NAICS code appeal FAR CFR Non-manufacturer rule waivers FAR (f)(1)-(7) 13 CFR SDVOSB status protest FAR CFR WOSB Program status protest FAR /13 CFR

52 FAR (f ): No class waiver to NMR? Check out an individual waiver*

53 53 A. If you find no class waivers, an SBA individual waiver to the Nonmanufacturer Rule (NMR) may help you to achieve small business goals if*: B. A WAIVER FOR A SET-ASIDE IS NOT NEEDED WHEN: 1. ONE SMALL BUSINESS MANUFACTURER: * SMALL BUSINESS SET-ASIDE 2. SMALL BUSINESS MANUFACTURER, BRAND SPECIFIC OF ANY DOLLAR SIZE WITH FAR 6 JUSTIFICATION: * SMALL BUSINESS SET-ASIDE 3. LARGE BUSINESS, BRAND SPECIFIC (OR BRAND EQUIVALENT) REQUIREMENT $25,000 OR LESS WITH FAR 6: * SMALL BUSINESS SET-ASIDE C. GSA SCHEDULE: USE THE CLOSEST CODE LISTED ON THE SCHEDULE. THEN SAME AS ABOVE IF NO CLASS WAIVER. D. EXCEPTION TO NMR IF PROCUREMENT $25,000 OR LESS. (FAR (F)(7)(B))

54 NMR Program Office 54 The preferred and most expeditious method for asking questions and submitting waiver requests is by to