Small Business Programs Small Business Administration Office of

Small Business Programs Small Business Administration Office of Government Contracting Presented by Ms. Marichu Relativo Procurement Center Representative (PCR) Guam Oct 2010 www. sba. gov

Basis for the Small Business Programs Ø Small Business Act Ø To aid, counsel, assist & protect the interests of small business concerns Ø Goal of policy is to ensure that a fair proportion of purchases, contracts & subcontracts be placed with small businesses “Level the Playing Field” http: //www. sba. gov/library/lawroom. html Guam Oct 2010 www. sba. gov 2

What is a Small Business? Ø Organized for profit Ø Place of business in the U. S. Ø Operates primarily in the U. S. or makes significant contribution to the U. S. economy ØTaxes, U. S. products, materials or labor Ø Cannot be dominant in its field on a national basis Ø Self Certification in the Central Contractor Registration (CCR) database Guam Oct 2010 www. sba. gov 3

Small Business is Determined by ØMeasured by its employment, business receipts, or business assets ØMeet the numerical small business size standard for its industry ØSBA Table of Size Standards ØNorth American Industry Classification System (NAICS) industries codes Size Table: http: //www. sba. gov/size NAICS: http: //www. osha. gov/oshstats Guam Oct 2010 www. sba. gov 4

Small Business Programs & Government-wide Goals Ø 23% - Small Business (SB) Ø 5% - Small Disadvantaged Business (SDB) (includes 8(a) Business Development) Ø 5% - Women-owned Small Business (WOSB) Ø 5% - Service Disabled Veteran Owned SB (SDVOSB) Ø 3% - HUBZone Small Business FAR Part 19, Public Laws, Code of Federal Regulations (13 CFR) Guam Oct 2010 www. sba. gov 5

Government-wide Goals & Score Cards Ø Goals negotiated between SBA and the President Ø Goals are monitored & reported by SBA Ø Prior to 2009 – Color codes/After 2009 – Letter grade Ø Reports are published in the SBA website Ø Government-wide overall grade for 2009 – “B” or 94. 1 Ø Dept of Defense overall grade for 2009 – “B” or 93. 6 http: //www. sba. gov/aboutsba/sbaprograms/goals/SCORECARD 2009. html Guam Oct 2010 www. sba. gov 6

What are the Governing Regulations? Ø Title 13 of the Code of Federal Regulations (CFR) Ø 121 -Small Business Size Regulations Ø 124 -8(a) Business Development/SDB Programs Ø 125 -Government Contracting Programs (including the SDVOSB Program) Ø 126 -HUBZONE Program Ø Federal Acquisition Regulation (FAR) Ø FAR Part 19 Ø DFARS, AFARS, EFARS, etc FAR Part 19, Public Laws, Code of Federal Regulations (13 CFR) Guam Oct 2010 www. sba. gov 7

Small Business Size Standards Ø Firms must be small based on their primary NAICS Code, including affiliates Ø Size is determined either by: ØAverage 3 years revenues ØNumber of employees ØManufacturers ØDealers ØWholesalers Source: 13 CFR 121 Size Regulations Website: http: //www. sba. gov/regulations/121/ Guam Oct 2010 www. sba. gov 8

Common Size Standards Ø 500 employees – most manufacturer & mining industries Ø 100 employees – all wholesales trade industries Ø 500 employees – for federal prime contracts & subcontracts Ø $6. 5 M – most retail & service industries Ø $31 M – most general & heavy construction industries Ø $13 M – all special trade contractors Ø $0. 75 M – for most agricultural industries Source: 13 CFR § 121. 104; 13 CFR § 121. 106; 13 CFR 121. 201 Website: http: //www. sba. gov/regulations/121/ Guam Oct 2010 www. sba. gov 9

Size Standards Update Ø Size Standard Final Rule issued October 6, 2010 ØEffective November 5, 2010 ØLast change July 2008 Ø To Expand Opportunities for Small Businesses Ø Keep up with the economy Ø Keep up with federal contracting marketplace Ø The upcoming changes: ØSector 44 -45, Retail Trade ØSector 72, Accommodation and Food Services ØSector 81, Other Services Source: Federal Register 61597, 61604, 61591 Guam Oct 2010 www. sba. gov 10

Small Business Programs What is the 8(a) Small Business Development Program? FAR Part 19, Public Laws, Code of Federal Regulations (13 CFR) Guam Oct 2010 www. sba. gov 11

Who are Socially Disadvantaged Individuals? Ø Subjected to racial or ethnic prejudice or cultural bias because of their identity as members of a group Ø Social disadvantage must stem from circumstances beyond their control Ø In the absence of evidence, individuals who are members of the following designated groups are presumed to be socially disadvantaged: 13 CFR 124. 103 Guam Oct 2010 www. sba. gov 12

Who are Socially Disadvantaged Individuals? Ø Black Americans Ø Hispanic Americans Ø Native Americans (American Indians, Eskimos, Aleuts, and Native Hawaiians) Ø Asian Pacific Americans (persons with origins from Japan, China, the Philippines, Vietnam, Korea, Samoa, Guam, U. S. Trust Territory of the Pacific Islands [Republic of Palau], Commonwealth of the Northern Mariana Islands, Laos, Cambodia [Kampuchea], Taiwan; Burma, Thailand, Malaysia, Indonesia, Singapore, Brunei, Republic of the Marshall Islands, Federated States of Micronesia, Macao, Hong Kong, Fiji, Tonga, Kiribati, Tuvalu, or Nauru; Subcontinent Asian Americans (persons with origins from India, Pakistan, Bangladesh, Sri Lanka, Bhutan, the Maldives Islands or Nepal), and Ø Members of other groups designated by the SBA Guam Oct 2010 www. sba. gov 13

Small Disadvantaged Business (SDB) Ø At least 51% owned by one or more individuals who are both socially and economically disadvantaged Ø Must be citizen of the United States Ø Must manage and control daily business operations Ø Have management or technical expertise directly related to the primary product or service of the business Ø SBA-no longer certifies SDB as of Oct 08 Ø Self certify in CCR & ORCA Guam Oct 2010 www. sba. gov 14

8(a) Business Development Program Ø See definition as the Small Disadvantage Business (SDB) Ø In business at least two years Ø Certified and approved by SBA Ø Program is for nine years Ø First 4 years – Developmental Stage Ø Last 5 years – Transitional Stage Ø Monitored by SBA local district office Ø Early graduation Ø Government-wide goal: 5 % Ø SDB & 8(a) goals combined 13 CFR 124. 8 Guam Oct 2010 www. sba. gov 15

8(a) Set-Aside Ø Sole source up to $3. 5 M / $5. 5 M for manufacturing NAICS Ø Unlimited amount to Alaska Native Corp (ANC) firms Ø Sole Source & Competitive 8(a) over $100 K Ø For competitive 8(a) – agency submits offer letter to the SBA district office serving the geographical area in which the procuring activity is located; Ø For competitive and open construction requirements – agency submits offer letter to the SBA district office serving the geographical area in which the work is to be performed Ø For competitive 8(a) - Rule of two applies 13 CFR 124. 8; FAR 19. 8 Guam Oct 2010 www. sba. gov 16

8(a) Set-Aside cont ØFor sole source 8(a): ØSole source is not protestable ØWithdrawal from the 8(a) program – Submit request to SBA with justification/approval must be obtained prior to changing acquisition ØCompetitive 8(a) can be restricted to a state or region ØExample: Alaska 8(a) firms only or Region 10 8(a) firms only (include restriction in the synopsis) 13 CFR 124. 502 and FAR 19. 8 Guam Oct 2010 www. sba. gov 17

8(a) Set-Aside cont Ø Sole Source and competitive 8(a) under $100 K Ø For sole source – agency contacts SBA for firm’s eligibility prior to award Ø For competitive – agency submits waiver request letter to SBA for approval Ø Sole Source 8(a) – synopsis in FBO not required Ø “ 8(a) stays 8(a)” Ø Unless it is a new requirement (25% increase in scope from previous requirement) Ø All construction requirements are considered new requirements Ø Adverse impact – SBA‘s written determination that acceptance of the procurement for 8(a) award would have an adverse impact on small business (see 13 CFR 124. 504(c)) Guam Oct 2010 www. sba. gov 18

8(a) Business Development Application Process Ø Electronic Application on line: www. sba. gov Ø Hard copy application – mail to: Small Business Administration Division of Program Certification & Eligibility (DPCE) 455 Market Street, 6 th Floor San Francisco, CA 94105 Tel: (415 -744 -0328 13 CFR 124. 8 Guam Oct 2010 www. sba. gov 19

Small Business Programs What is the HUBZone Program? FAR Part 19, Public Laws, Code of Federal Regulations (13 CFR) Guam Oct 2010 www. sba. gov 20

HUBZONE Ø Must be owned & controlled at least 51% by Ø U. S. Citizen, Community Development Corporation, an agricultural cooperative, or Indian tribe Ø Principal office must be located within HUBZone Ø Includes land in Indian Country/Reservation Ø Includes military facilities closed by the BRAC Act Ø Employees – 35% must reside in a HUBZone area Ø Must be a small business by SBA standards Ø Certification by SBA – no term limit Ø Joint Venture (JV) only with another HUBZone firm Source: 13 CFR 126. 607(b); FAR 19. 1305(a) Guam Oct 2010 www. sba. gov 21

HUBZONE Prime Contract Benefits Ø Competitive HUBZone Set-aside Ø Rule of Two – Reasonable expectation for competition Ø Fair market price Ø Sole Source – only one source available Ø Not exceed $5. 5 M – manufacturing NAICS code Ø Not exceed $3. 5 M – all other NAICS codes Ø Full/Open – 10% preference on price Ø Government-wide goal - 3% HUBZone area: http: //www. sba. gov/hubzone (search by address) On line Application: https: //eweb 1. sba. gov/hubzone/internet Website: http: //www. sba. gov/hubzone Guam Oct 2010 www. sba. gov 22

Small Business Programs What is the Service Disabled Veteran-Owned Small Business Program (SDVOSB)? FAR Part 19, Public Laws, Code of Federal Regulations (13 CFR) Guam Oct 2010 www. sba. gov 23

Service Disabled Veteran. Owned Business Ø The Veterans Benefit Act of 2003 Ø Procurement can be set aside or sole source Ø Rule of Two – Reasonable expectation for competition Ø Only VA can set aside for veteran-own small business ØRequired to register in http: //www. vip. vetbiz. gov/ Ø Self certification in CCR Ø Under review due to abuse Ø Government-wide goal: 3 % Source: 13 CFR 125. 8 – 125. 13; FAR 19. 307 Website: http: //www. vetbiz. gov/ Guam Oct 2010 www. sba. gov 24

Veterans First Buying Authority Ø Dept of Veteran’s Affair (VA) program Ø First & second priorities for contracting procurement Ø Service-Disabled Veteran-owned small business (SDVOSB) Ø Veteran-owned small business (VOSB) Ø Must register – Vendor Information Pages (VIP) database Ø Ø Ø Veteran status verified – Veterans Benefit Administration’s BIRLS System Only one registration for one company allowed DUNS number required DD Form 214 required Fraudulent claims – debarred for five years Verification of status – once a year Website: www. vetbizresourcecenter. org Register: http: //www. vetbiz. gov/ VBA Office: 800 -827 -1000 Guam Oct 2010 www. sba. gov 25

Small Business Programs What is the Woman-Owned Small Business Program (WOSB) & Economically Disadvantaged Woman-Owned Small Business (EDWOSB)? FAR Part 19, Public Laws, Code of Federal Regulations (13 CFR) Guam Oct 2010 www. sba. gov 26

Woman-Owned Small Business (WOSB) Ø WOSB - At least 51% owned & controlled by one or more women Ø EDWOSB - Economically Disadvantaged & WOSB Ø Manage daily business operations Ø No outside employment Ø United States Citizen Ø Self-certification - CCR & ORCA Ø Government-wide goal: 5% Woman Business Center (WBC): http: //www. sba. gov/aboutsba/sbaprograms/onlinewbc http: //www. sba. gov/services Guam Oct 2010 www. sba. gov 27

WOSB/EDWOSB New Ruling Ø Set-aside preference effective February 4, 2011 Ø Certification as small business & WOSB/EDWOSB Ø By Federal agency, State Government, or national certifying entity approved by SBA Ø By the contracting officer supported by adequate documentation Ø Self-Certification in CCR & ORCA WOSB Federal Contract Program Webpage http: www. sba. gov/wosb 1 -800 -U-ASK-SBA (827 -5722) Guam Oct 2010 www. sba. gov 28

WOSB/EDWOSB New Ruling Ø Third-Party Certification Ø Third Party Certifier approved by SBA Ø U. S. Dept of Transportation’s (DOT) Disadvantaged Business Enterprise (DBE) Program Ø As an 8(a) participant Ø Must be provided to the WOSB Program Repository Ø Contracting Officer set-aside to WOSB/EDWOSB: Ø Ø Designated 83 NAICS codes currently underrepresented Rule of Two – Reasonable expectation for competition $5 Million – Manufacturing / $3 Million all others Fair and reasonable price Final Rule on 13 CFR Parts 121, 124, 125 Guam Oct 2010 www. sba. gov 29

Teaming Arrangements Ø Two or more companies form a partnership or joint venture to act as prime contractor Ø Desirable to provide the best combination of performance, cost, quality, and delivery Ø Formal and informal / traditional/non-traditional Ø Limitation on subcontracting (small business to selfperform on the contract) Ø Construction – 15 % Ø Services – 50% Ø Supplies – 50% Ø Specialty Trade – 25% Guam Oct 2010 Labor only www. sba. gov 30

Types of Teaming Arrangements ØPrime/Subcontractor relationship (traditional) ØJoint Ventures (JV) ØMentor Protégé ØSBA approved mentor protégé Øhttp: //www. sba. gov/aboutsba/sbaprograms/8 abd/ment orprogram/index. html ØMust be approved by SBA in advance ØReference: 13 CFR 124. 520 ØDept of Defense approved mentor protégé Øhttp: //www. acq. osd. mil/osbp/mentor_protege/ Guam Oct 2010 www. sba. gov 31

Joint Venture (JV) Ø Each firm should be small to stay small (revenues combined) Ø 8(a) JV must be approved by SBA Ø HUBZone JV – both firms must be HUBZone Ø SDB JV may be entitled to price adjustment in competitive acquisition under authorized NAICS codes Ø SDVOSB JV – the SDVOSB 51 ownership for SDVOSB set asides Ø Performance of Work (Self-perform by JV) Ø Service – 50% Labor only Ø Supplies – 50% Ø Construction – 15% Ø Special Trade – 25% Guam Oct 2010 www. sba. gov 32

Mentor Protégé Ø SBA approved mentor protégé Ø The protégé must be an 8(a) firm Ø The mentor can be a large business Ø The protégé can joint venture with the mentor Ø Mentor can be a large business/doesn’t impact the small business size status Ø Participate on any acquisition (set-asides or not) Ø Dept of Defense (DOD) mentor protégé – Ø Provide mutual benefits to the small business and the other more established business Ø Protégé receives the assistance (financially, technical, managerial) Ø Mentor provides subcontracting opportunities to Protégé Guam Oct 2010 www. sba. gov 33

Order of Preference Ø Parity among the following: Ø 8(a) BD Ø HUBZone Ø SDVOSB Ø WOSB – Preference status – effective February 5, 2011 Ø Underrepresented NAICS codes set aside to WOSB/EDWOSB Ø General Rule: “Once 8(a) – Stays 8(a)” Ø Per FAR 19. 8/13 CFR 124 Ø Exception: New requirement or requirement increased by 25% Ø Construction requirement – considered new requirement Ø Same applies to the other Small Business Programs Ø Geographic Restriction on set aside: Ø None Ø Exception: Alaska ANC/8(a) firms Guam Oct 2010 www. sba. gov 34

Small Business Set Aside Rule Ø Under Simplified Acquisition Threshold (under $150, 000): Ø FAR 19. 502 -2(a) -- automatically reserved exclusively for small business concerns (including 8(a), HUBZone, SDVOSB) Ø Rule of Two – two of more firms available to do the work Ø Above Simplified Acquisition Threshold – Order of Precedence: CFR References: § 13 CFR 126. 607(b) – HUBZone § 13 CFR 125. 19(b) – SDVOSB § 13 CFR 124. 503 (j) – 8(a) Guam Oct 2010 FAR References: § 19. 501(c), (d), (e) § 19. 800(e) – 8(a) § 19. 1305(a) – HUBZone § 19. 1404(d) – SDVOSB § 19. 1405(a), (c) – SDVOSB Websites: http: //farsite. hill. af. mil/ www. sba. gov 35

Size Protest Ø Who can submit a size protest? Ø Firm involved in the acquisition Ø Who handles Size Protest? Ø SBA Office of Government Contracting (Size Specialist) Ø Forward the Size Protest to the GC office servicing the firm’s principal office location Ø For Guam firms – send to: Small Business Administration** Office of Government Contracting, Area 6 455 Market Street, 6 th Floor San Francisco, CA 94105 Phone: 415 -744 -8429 **Please call Carol Bunts at (415) 744 -6844 before forwarding your size status protest Guam Oct 2010 www. sba. gov 36

Size Do Matter Ø Micro-Purchase: Ø Supplies (under $3, 000) Ø Service (under $2, 500) Ø Construction (under $2, 000) Ø Simplified Acquisition: Ø Reserved for small business set aside (under $150, 000) Ø Rule of Two Ø Formal Acquisition: Ø Bids & Proposals (over $150, 000) Ø Consider small business set aside Ø Rule of Two Guam Oct 2010 www. sba. gov 37

Register/Update Your Business Ø Complete Central Contractor Registration Database (CCR) ØKeep Current (Update yearly) Øwww. ccr. gov Ø Complete SBA Profile (Dynamic Small Business Search (DSBS) Ø http: //dsbs. sba. gov/dsbs/search/dsp_dsbs. cfm Ø Complete on-line Representations and Certifications Application (ORCA) Ø https: //orca. bpn. gov/ Guam Oct 2010 www. sba. gov 38

Additional Assistance Ø Local District Offices and Resource Partners Ø SBA Guam Brand Office – Ken Lujan (kenneth. lujan@sba. gov) /Tel: 671 -472 -7277 Ø SBA Procurement Center Representative (PCR) – Hawaii, Guam & Pacific Insular Area – Larry Orr (Larry. orr@sba. gov)/ Tel: 808 -474 -7317 Ø Procurement Technical Assistance Center (PTAC) http: //www. ptacalaska. org/ Ø Small Business Development Centers www. sba. gov/sdbc/ ØSmall Business Specialists (SBS) www. acq. osd. mil/sadbu Guam Oct 2010 www. sba. gov 39

Questions? Guam Oct 2010 www. sba. gov 401