8a Business Development Program Presented by Francine Morris

8(a) Business Development Program Presented by Francine Morris, Program Analyst 8(a) Business Development /Office of Management and Technical Assistance to Department of Health & Human Services November 13, 2014

Training Outline 8(a) BD Program Overview 8(a) Offer Letters Determinations of Eligibility 8(a) and GSA Schedules Contract Modification vs a “New Requirement” Contract Modifications Contract Extensions/Bridge Contracts Sole Source Requirements Above the Threshold Competitive Requirements Below the Threshold Requests to Release Requirement From the 8(a) Program Cure Notices Contract Terminations

8(a) BD Program Over 8(a)BD Program Objectives (Sec. 204 of Public Law 100 -656) “to promote the business development of small business concerns owned and controlled by socially and economically disadvantaged individuals…” “to promote the competitive viability of such concerns…” “to clarify and expand the program for procurement by the United States…” In summary, a nine-year, 2 stage business development program, providing both developmental and contractual assistance to firms that are qualified for participation.

Program Overview Cont… SBA serves as the prime contractor on 8(a) Contracts. Responsible for Ensuring Continued Program Eligibility of Program Participants Review and Approve all 8(a) Joint Venture Agreements Prior to Contract Award May Assist with Contract Negotiations Report and Provide copies of all Contract Awards, Modifications, Exercised Options and Purchase Orders to SBA Shall Provide SBA with all Non-Classified Information in Contract Files for On-Site Agency Reviews Cannot Count Contract Award Dollars as 8(a) unless Requirement was formally Offered and Accepted by SBA

Preparing the Offering (1) A description of the work to be performed or items to be delivered, and a copy of the statement of work, if available. (2) The estimated period of performance. (3) The NAICS code that applies to the principal nature of the acquisition. (4) The anticipated dollar value of the requirement, including options, if any. (5) Any special restrictions or geographical limitations on the requirement (for construction, include the location of the work to be performed). (6) Any special capabilities or disciplines needed for contract performance. (7) The type of contract anticipated. (8) The acquisition history, if any, of the requirement, including the names and addresses of any small business contractors that have performed this requirement during the previous 24 months. (9) A statement that prior to the offering no solicitation for the specific acquisition has been issued as a small business, HUBZone, or service-disabled veteran-owned small business set-aside and that no other public communication (such as a notice through the Government wide point of entry (GPE)) has been made showing the contracting agency’s clear intention to set-aside the acquisition for small business, HUBZone small business, or service-disabled veteran-owned small business concerns.

Preparing the Offering (10) Identification of any particular 8(a) concern designated for consideration, including a brief justification, such as— (i) The 8(a) concern, through its own efforts, marketed the requirement and caused it to be reserved for the 8(a) Program; or (ii) The acquisition is a follow-on or renewal contract and the nominated concern is the incumbent. (11) Bonding requirements, if applicable. (12) Identification of all known 8(a) concerns, including HUBZone 8(a) concerns, that have expressed an interest in being considered for the specific requirement. (13) Identification of all SBA field offices that have asked for the acquisition for the 8(a) Program. (14) A request, if appropriate, that a requirement with an estimated contract value under the applicable competitive threshold be awarded as an 8(a) competitive contract (see 19. 805 -1(d)). (15) A request, if appropriate, that a requirement with a contract value over the applicable competitive threshold be awarded as a sole source contract (see 19. 805 -1(b)). (16) Any other pertinent and reasonably available data

Where to Send Offering Letters 8(a) sole source requirements offered to a specific Participant, to the SBA district office servicing the Participant. 8(a) competitive and open construction requirements, to the SBA district office serving the geographical area in which the work is to be performed; Competitive 8(a) requirements and sole source open requirements other than construction, to the SBA district office serving the geographical area in which the procuring activity is located; 8(a) requirements to be performed overseas, SBA Headquarters;

8(a) Offer Letters (Sole Source) Requirements at/under $4 M threshold NAICS Code Statement of Work Participant current & in compliance with 8(a) Program Firm is small under the requested NAICS Code Sole Source Restrictions (Transitional Stage of the 8(a) Program (Business Activity Target) No Sole Source contract awards after firm graduates 5 -working day Acceptance

Determinations of Eligibility Competitive Submit to the firms servicing District Office with the following information: Title the email as “Determination of Eligibility” Attach the Statement of Work including the anticipated dollar value of the requirement and the relevant NAICS Code in the SOW or body of the email. The Original closing date of the Solicitation In the body of the email name the specific firm and its address

Determinations of Eligibility Competitive The Offering letter The Acceptance Letter If needed SBA may request a copy of the solicitation

Basic Ordering Agreements Can Be Awarded on a Sole Source Basis if estimated Value Including all Options is Below the Competitive Threshold Each Task Order Requires a Separate Offer and Acceptance Each Task Order is Treated as a Separate Contract Aggregate of all Task Cannot Exceed Sole Source Threshold SBA cannot accept any task order under it if the cumulative value of all the tasks awarded under the BOA, including the order under consideration, would exceed the competitive threshold If it anticipates that the total value of task or delivery orders to be awarded under a BOA will exceed the competitive threshold, the procuring activity must offer the BOA to SBA for competitive award.

GSA 8(a)Contract GSA STARS II GWAC – Offered and Accepted Competitive 8(a) requirement Sole Source Authority STARS II Ordering Guide

GSA Schedule Contracts GSA Schedules are not 8(a) Contracts GSA Schedule 8(a) Set-Aside Authority for Federal Supply Schedules - Rule Change November 2011 FAR Case 2011 -024 Note… Sole Sourcing contracts on a GSA Federal Supply Schedule is prohibited. (Competitive Procedures)

GSA Schedule 8(a) Set-Aside procedure You must offer the competitive to the 8(a) BD DO State that the requirement will be a GSA 8(a) Schedule award. Only firms that are 8(a) and hold the GSA schedule required is eligible to bid on the opportunity. Follow the GSA procedures for the competitive process and award. Agency will receive 8(a) credit for the award. Cannot Count Contract Award Dollars as 8(a) unless Requirement was formally Offered and Accepted by SBA

Contract Modifications versus a “New Requirement” determination

Contract Modification Req’d Info Name and address of the 8(a) firm Date the requirement offered to the 8(a) Program Contract # and corresponding Buyer # Original estimated value of the contract Contract current period of performance Value contract dollars obligated & expended to date Will the dollar value proposed modification will exceed original estimated value of the contract What event(s) caused need to increase the estimated value of the contract or other modification

Waivers

Sole Source Above Threshold To The Servicing District Office …. First, the usual scope and contents for the Offer Letter wording, as it currently exists and in accord with 13 CFR 124. 502(c), plus accompanied by the Statement of Work in a separate document. A thorough explanation of the procuring agency’s making this a Sole Source Award in the approximate amount proposed, rather than competitive (13 CFR 124. 506(d)), including, but not limited to, that there is not a reasonable expectation that at least two eligible 8(a) Participants that will submit offers at a fair price (13 CFR 124. 506(d)). Must be approved by AA/SBA. [continued on next slide]

Sole Source Above Threshold (continued) The procurement agency’s written commitment to continue to support the SBA 8(a) BD Program on a competitive basis, including the following data: The last two most recent fiscal years’ 8(a) contract dollars that were awarded by the procuring agency to 8(a) Program Participants on a competitive basis; ii. The current fiscal year’s forecast to award contracts to the 8(a) BD Program; and iii. The result of any market research conducted by the procuring agency under the NAICS Code assigned to the proposed contract. i.

Competitive Requirements Below the Threshold To The Servicing District Office…. Agency’s Offer Letter, per 13 CFR 124. 502(c); An explanation of the procuring agency’s determination that technical competitions are required or a large number of potential awardees exist [13 CFR 124. 506(c)]; Agency’s written commitment to continue to support the 8(a) BD Program on a non-competitive basis below the competitive threshold. This explanation must include: [continued on next slide]

Competitive Requirements Below the Threshold (cont’d) The last two most recent fiscal years’ 8(a) contract dollars that were awarded by the Procuring Activity to 8(a) BD Program Participants on a sole source basis; ii. The current fiscal year’s forecast to award contracts to the 8(a) BD Program; and iii. The result of any market research conducted by the Procuring Activity. [continued on next slide for Competitive Requirements Below the Threshold] i.

Competitive Requirements Below the Threshold (cont’d) Dynamic Small Business Search (DSBS) result of 8(a) firms performing under the NAICS Code assigned to the respective contract; District Office’s recommended 8(a) BD Program Participant(s) from the DSBS listing that are qualified to perform the Statement of Work. Package is forwarded to SBA Headquarters. Analyst will make recommendations to SBA AA/BD for his decision to approve or decline.

Request to Release From The 8(a) Program (124. 504(d) To The Servicing District Office…. Procuring agency’s official Request to Release on its Letterhead, signed by authorized person, to include: The procurement history; The NAICS Code assigned to the requirement; If the procurement was previously offered to SBA under the 8(a) BD Program: (1) SBA’s Acceptance Letter and (2) SBA’s Buyer Number; The result of any market research conducted by the Procuring Activity; [continued on next slide]

Request to Release From The 8(a) Program The Agency’s written commitment to continue to support the 8(a) BD Program. This explanation must include: Ø (1) the prior two years’ 8(a) contract dollars that were awarded by the Procuring Activity to 8(a) BD Program Participants; and Ø (2) the current fiscal year’s forecast to award contracts to the 8(a) BD Program. Plus, any additional supporting documentation. Address letter to SBA Servicing District Office

8(a) Contract Cure Notices Whereas SBA is the Prime on all 8(a) Contracts, please include the SBA District Office that issued the respective Acceptance Letter on all of your agency’s issued 8(a) Contract Cure Notices. The firm’s Business Opportunity Specialist (BOS) will contact the respective 8(a) firm’s owner to determine the issue and the resolution plan. The BOS will participate with the 8(a) firm in the communication with your agency on this issue.

Terminations for Convenience The SBA District Office that approved the Offer must also be informed of Terminations for Convenience, as well as the 8(a) firm from your agency. The Servicing District office must be notified in the event the agency decides not to exercise an option on existing contract.

Terminations for Default Whereas SBA is the Prime Contractor for all 8(a) Contracts, SBA must be informed commensurate with your agency informing the 8(a) firm contractor. Inform SBA through the SBA District Office that approved the Offer. The BOS will contact the firm to determine a course of action.

Mentor Protégé Program The purpose of the Mentor/Protégé program is to enhance the capabilities of 8(a) participants and to improve their ability to successfully compete for federal government contracts Mentors may provide the following forms of assistance to Protégés: a. Technical and management assistance; b. Financial assistance, including equity investments and/or loans; c. Subcontracting support; and d. Assistance in performing prime contracts through joint venture arrangements.

Mentor Protégé Program The benefits of the Mentor/Protégé relationship include: The two firms approved by SBA to be a Mentor and Protégé under 13 CFR 124. 520 may joint venture as a small business for any government procurement, provided that the Protégé qualifies as small for the size standard corresponding to the NAICS code assigned to the procurement, and other relevant program requirements are met. In order to assist the Protégé to raise capital, the Mentor may own an equity interest of up to 40 percent in the Protégé despite the more limited, general ownership restrictions on eligibility in 13 CFR 124. 105(g) and (h). In the event the Mentor/Protégé relationship ends, the Mentor may retain its ownership percentage in the Protégé existing at the time the relationship ends to avoid any detrimental impact on capital.

Mentor Protégé Program A determination of affiliation or control may not be found between a Protégé firm and its Mentor based solely on the Mentor/Protégé Agreement or any assistance provided pursuant to the Agreement. A contract cannot be awarded to the Mentor and Protégé based simply on the Mentor/Protégé Agreement. In order for a Mentor to participate in an 8(a) contract as a prime with its Protégé, they must joint venture. The M/P Agreement must be approved before a joint venture can be submitted.

Joint Ventures 13 CFR 121. 103 The Program enables business concerns to carry out no more than: three specific or limited-purpose business ventures for joint profit over a two year period Starting from the date of the award of the first contract without the partners to the joint venture being deemed affiliated for all purposes Concerns are able to combine Efforts Skill Knowledge Money Property

Joint Ventures If approved by SBA, a Participant may enter into a joint venture agreement with one or more other small business concerns, whether or not 8(a) Participants, for the purpose of performing one or more specific 8(a) contracts. A joint venture agreement is permissible only where an 8(a) concern lacks the necessary capacity to perform the contract on its own, and the agreement is fair and equitable and will be of substantial benefit to the 8(a) concern. However, where SBA concludes that an 8(a) concern brings very little to the joint venture relationship in terms of resources and expertise other than its 8(a) status, SBA will not approve the joint venture arrangement.

Populated and Unpopulated JVs Populated Joint Venture The entity is contains personnel performing the requirements of the contract. The 8(a) participant must demonstrate what it will gain from performance of the contract and How such performance will assist its business development Must Demonstrate control over the JV

Populated and Unpopulated JVs, cont’d… Unpopulated Joint Venture Populated only with 1 or more administrative personnel The Project Manager is an employee of the 8(a) Managing Venturer 8(a) firm MUST perform at least 40% of the work performed by the JV Must be more than administrative or ministerial in order to gain substantive experience.

Joint Ventures Performance of work. For any 8(a) contract, including those between mentors and protégés authorized by 13 CFR § 124. 520, the joint venture must perform the applicable percentage of work required by FAR 52 -219 -14, and the 8(a) partner(s) to the joint venture must perform 40% of the work performed by the J/V. SBA must approve a joint venture agreement prior to the award of an 8(a) contract on behalf of the joint venture. Upon SBA’s Approval. Joint Venture Entity is listed in CCR Joint Venture Agreements limited to 3 Contracts over a 2 year period Contract execution - Where SBA has approved a joint venture, the procuring activity will execute an 8(a) contract in the name of the joint venture entity. (Please include the name of the 8(a) Participants)

Questions? ____________ __ Contact information for Presenters: Francine. Morris@sba. gov; 202 -205 -7204 _________________ (http: //www. sba. gov/category/navigation-structure/8 abusiness-development-program) Thank You!