Federal Contracting Opportunities

contextual

The U.S. government is the world's largest buyer of products and services. Purchases by military and civilian installations under federal contracts and GSA Schedule Awards amount to about $200 Billion per year.

Moreover, federal agencies are required by law to establish contracting goals, such that 23% of all government buys are intended to go to Small Businesses.

Certain Small Businesses may qualify for further special consideration under a number of other rubrics. Are you a woman-owned business? A small disadvantaged business? A foreign-service disabled-veteran business? A HUBZone business? An 8(a) business?

Challenges ...

There are several contracting offices and procedures that reflect a statutory obligation to consider small or otherwise disadvantaged businesses, but the codes and regulations that govern this process can be difficult to negotiate. This complexity can intimidate businesses without neither the expertise nor time to come to understand them. Therefore, much potential business goes unclaimed.

Small Businesses tend not to have the resources to devote to understanding the complexities of the contracting process, while at the same time they also lack the resources to find assistance with the large, expensive firms that handle bigger government contracts.

The Bayne Law Group can support your efforts to attain Success with Federal Contracting Opportunities ...

Bayne Law Group LLC focuses its specialization precisely on the interaction between federal contracting opportunities and Small Businesses interested in them. We provide help with certification, contracting, and (if necessary) the appeals process and we play an advocacy role in representing your interests to federal procurement offices. And, because we limit our assistance to Small Businesses, we do so at an affordable rate.

Follow our informational packet either by scrolling down or by following links to the sections that are of the most interest.

FAQs concerning Set-Asides and Acquisitions

  1. What are Federal Set-Asides?
  2. Who determines when government purchases are Set-Aside for limited competition?
  3. What are the requirements to be awarded a Set-Aside? (This also applies to 8(a) contracts.)
  4. What is the Non-Manufacturer Rule?
  5. What is the Rule of Two?
  6. What are the different categories of acquisition, and how do they correspond to government Set-Asides and acquisition procedures?
  7. What is the bottom line on the relation between Set-Asides and acquisition thresholds?
  8. When do partial Set-Asides apply?
  9. What are the methods of conducting Set-Asides?
  10. What are the circumstances under which Set-Asides are withdrawn, modified, or dissolved?
  11. What Set-Aside categories are there, and what is the precedence for awarding Set-Asides assigned to participants with different Program Statuses?

1. What are Federal Set-Asides?

To foster an equitable federal procurement policy, government-wide small-business goals, in terms of a percentage of annual expenditure, are established for federal agencies. The Small Business Administration (SBA) negotiates the goals annually with each federal agency on an individual basis. Currently, the overall Small Business goal is 23%. That amounts to $46 billion. That figure includes $10 billion each for Small Disadvantaged Businesses and Women-owned Small Businesses (at a 5% goal) and $6 billion each for HUBZone Small Businesses and Service-Disabled Veteran-Owned Businesses (at a 3% goal).

The Small Business Set-Aside Program (SBSA) helps assure that the Government meet these goals by reserving (i.e., "setting aside") certain government purchases exclusively for participation by Small Business concerns. It gives Small Businesses an opportunity to bid on contracts without having to compete with those enormous firms whose resources far outstrip their own.

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2. Who determines when government purchases are Set-Aside for limited competition?

Many Set-Asides are required by Federal Regulations. Otherwise, the determination to make a Small Business Set-Aside may be unilateral or joint.

  • The determination is usually made unilaterally by the Contracting Officer (CO)
    • The CO reviews acquisitions to determine if they can be Set-Aside for Small Business.
    • the CO considers the recommendations of the agency Small Business Program personnel and documents why a Set-Aside is inappropriate when the acquisition is not set aside.
    • If the acquisition is Set-Aside based on this review, it is a unilateral Set-Aside by the CO.
  • A joint determination is made by the SBA, Procurement Center Representative (PCR) and concurred with by the CO.
  • The regulations specify that, to the extent practicable, unilateral determinations initiated by a CO, rather than joint determinations, should be used as the basis for Small Business Set-Asides.

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3. What are the requirements to be awarded a Set-Aside? (This also applies to 8(a) contracts.)

To get this type of contract, a business must perform at least a given percentage of the contract. This provision limits the amount of subcontracting a concern may enter into with other firms when performing these types of contracts. The provisions are as follow:

  • Construction -- For general and heavy construction contractors, at least 15 percent of the cost of the contract, not including the cost of materials, must be performed by the prime contractor with its own employees. For special trade construction, such as plumbing, electrical, or tile work, this requirement is 25 percent.
  • Manufacturing -- At least 50 percent of the cost of manufacturing, not including the cost of materials, must be done by the prime contractor.
  • Services -- At least 50 percent of the contract cost for personnel must be performed by the prime contractor's own employees.

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4. What is the Non-Manufacturer Rule?

The Non-Manufacturer rule is one of two important principles that guide the awarding of contracts.

  • The rule: Under a Small-Business or 8(a) program Set-Aside of a certain size (excepting one for construction or services), a contractor must provide either its own product of the product of another Small Business.
  • Any Small Business that submits a bid or offer in its own name (other than on a construction or service contract, but which proposes to furnish a product which it did not itself manufacture) is deemed to be a Small Business when it has no more than 500 employees.
    • EXCEPTION: when the anticipated cost of the procurement is less than $25,000 (i.e., a micropurchase), the offer or can supply the end product of any business as long as it is domestically manufactured or produced.
    • WAIVER: For a specific solicitation, a CO may request from the SBA a waiver of the non-manufacturer rule requirement if no known domestic Small Business manufacturers or processors can reasonably be expected to offer a product meeting the requirements of the solicitation.

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5. What is the Rule of Two?

The Rule of Two is one of two important principles that guide the awarding of contracts.

  • The rule: The Contracting Officer (CO) will set aside an acquisition for Small Business participation, as long as there is a reasonable expectation that offers will be obtained from two or more Small Business concerns that are competitive in terms of market prices, quality, and delivery.
  • If only one acceptable offer is received from a responsible Small Business concern in response to a Set-Aside, the CO is required to make an award to that firm.
  • Except as authorized by law, a contract may not be awarded as a result of a Set-Aside if the cost to the awarding agency exceeds the fair market price.
  • If no acceptable offers are received from responsible Small Business concerns, the Set-Aside will be withdrawn and the product or service, if still valid, will be solicited on an unrestricted basis.

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6. What are the different categories of acquisition, and how do they correspond to government Set-Asides and acquisition procedures?

Set-Aside eligibility and other contracting procedures are determined by dollar threshold. Therefore, it is important to understand the acquisition thresholds instituted by the Federal Acquisition Streamlining Act of 1994.

  1. Micro-purchases are government purchases at or below $2,500 ($2,000 for construction).

· Micropurchases are non-competitive and not set aside for Small Businesses.

· Purchases in this category are made using the simplest and most direct buying techniques.

o Micro-purchases may be made by telephone, over the counter, over the Internet, or by other means of electronic communication. The contracting vehicle of choice in micro-purchases is the government-wide commercial purchase card.

o The policy objective is to make maximum use of these cards.

  1. Simplified acquisition procedures (SAP) apply to procurements with an estimated value of $100,000 and below.

· Under the Set-Aside program, every acquisition of supplies or services that has an anticipated dollar value between $2,500 and $100,000 (except for those acquisitions set aside for Very Small Business concerns) is automatically reserved exclusively for Small Businesses.

o However, every Set-Aside must meet the Rule of Two, which requires that there must be a reasonable expectation that offers will be obtained from two or more Small Business concerns that are competitive in terms of market prices, quality, and delivery.

o If only one acceptable offer is received from a responsible Small Business concern in response to a Set-Aside, the Contracting Officer is required to make an award to that firm.

o If no acceptable offers are received from responsible Small Business concerns, the Set-Aside will be withdrawn and the product or service, if still valid, will be solicited on an unrestricted basis.

· Simplified acquisitions are made using a number of contracting vehicles.

o e.g., Purchase Orders (PO), Basic Ordering Agreement (BOA), Indefinite Delivery/Indefinite Quantity (IDIQ), Fixed Price Contracts, Federal Supply Schedule (FSS)

o Agency buying-personnel may use oral or written solicitations.

o These personnel are encouraged to use the government-wide commercial purchase card or electronic purchasing techniques.

  1. Contracts over $100,000: The largest volume of dollars expended by the government is made through the use of formal (non-simple) procedures for acquisitions above the $100,000 simplified acquisition threshold.

a. SET-ASIDES: Any procurement over $100k is not automatically set aside.

· Therefore, buyers must make a determination as to what type of Set-Aside applies or whether the procurement is unrestricted.

· It is the case, however, that acquisitions exceeding the statutory Small Business Set-Aside threshold or $100,000 are Set-Aside for Small Business, when there is a reasonable expectation that offers will be obtained from at least two responsible Small Business concerns offering the products of different Small Business concerns and that award will be made at fair market prices. (i.e., if the Rule of Two is met).

· If the CO does not proceed with the Small Business Set-Aside and purchases on an unrestricted basis, the CO must include in the contract file the reason for this action

b. PROCEDURES

· Sealed Bidding is how the government contracts competitively when its requirements are clear.

o The Invitation For Bid (IFB) includes a description of the product or service to be acquired, instructions for preparing a bid, the conditions for purchase, packaging, delivery, shipping and payment, contract clauses to be included and the deadline for submitting bids.

o Under sealed bidding procedures, contractors submit bids that are opened publicly at a time and place designated by the buying agency.

o Contracting officials search for qualified Small Business contractors.

· Contract Negotiation occurs when the value of a government contract exceeds $100,000 and when it necessitates a highly technical product or service. In a negotiation, a statement of work outlining the goals to be achieved by the contractor describes the requirement.

o A Request for Proposal (RFP) will request a product or service the government needs, and solicit proposals from prospective contractors on how they intend to carry out that request, and at what price.

o Proposals in response to an RFP can be subject to negotiation after they have been submitted.

o When the government is merely checking into the possibility of acquiring a product or service, it may issue a Request for Quotation (RFQ): an offer by the government to the supplier to buy certain supplies or services upon specified terms and conditions.

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7. What is the bottom line on the relation between Set-Asides and acquisition thresholds?

Set-Aside possibilities are determined by the dollar thresholds met by Federal Solicitations:

  • $2,500 or less: use Micropurchase procedures - no Small Business Set-Asides

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8. When do partial Set-Asides apply?

The CO should set aside a portion of an acquisition, except for construction, for exclusive Small Business participation whenever:

  • The requirement is severable into two or more economic production runs or reasonable lots;
  • One or more Small Businesses are expected to have technical competence and productive capacity to satisfy the Set-Aside portion of the requirement at a fair market price;
  • A partial Set-Aside should not be made if there is a reasonable expectation that only two concerns (one large and one small) with capacity will respond with offers unless authorized by the Head of a contracting activity on a case-by-case basis. Similarly, a class of acquisitions, not including construction, may be partially Set-Aside. Under certain specified conditions, partial Set-Asides may be used in conjunction with multi-year contracting procedures.
  • Partial Set-Asides represent exceptions to the rule and are only employed under specific conditions which make total Set-Asides inappropriate.

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9. What are the methods of conducting Set-Asides?

Total Set-Asides may be conducted by using simplified acquisition procedures, sealed bids, or competitive proposals.

Partial Small Business Set-Asides may be conducted using sealed bids or competitive proposals.

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. What are the circumstances under which Set-Asides are withdrawn, modified, or dissolved?

  • The Contracting Officer (CO) may withdraw a Set-Aside whether it was joint or unilateral if the CO considers that award would be detrimental to the public interest (e.g., for reasons of urgency), or if a Small Business Set-Aside was not successful.
    • The CO must initiate a withdrawal of an individual Set-Aside by giving written notice to the agency Small Business Specialist and the SBA PCR stating the reasons.
  • If a Set-Aside acquisition or portion of an acquisition is not awarded, the unilateral or joint determination to set the acquisition aside is automatically dissolved. The required supplies and/or services for which no award was made may be acquired by sealed bidding or negotiation, as appropriate.
  • Before issuing a solicitation for items called for in a Small Business Set-Aside that was dissolved, the CO shall ensure that the delivery schedule is realistic in the light of all relevant factors, including the capabilities of Small Business concerns.

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11. What Set-Aside categories are there, and what is the precedence for awarding Set-Asides assigned to participants with different Program Statuses?

There are three Set-Aside categories:

Different categories of Set-Aside are awarded in this order of precedence:

  1. 8(a) Set-Aside, with preference for HUBZone firms
  1. Competitive HUBZone Set-Aside; HUBZone sole source award; 8(a) Program
  1. Total Small Business Set-Aside
  1. Partial Small Business Set-Aside
  1. Full and Open Competition

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SMALL BUSINESS OPPORTUNITIES

There are a range of opportunities for Small Businesses and even greater opportunities for small, disadvantaged businesses.

Before reviewing these opportunities, you can easily determine your pre-qualification for favorable treatment from government contracting officers.

Government Contracting goals ...

To ensure that Small Businesses get their fair share, statutory goals have been established for Federal executive agencies. They are:

· 23 percent of prime contracts for Small Businesses ($46b)

· 5 percent of prime and subcontracts for small disadvantaged businesses ($10b)

· 5 percent of prime and subcontracts for women-owned Small Businesses ($10b)

· 3 percent of prime contracts for HUBZone Small Businesses ($6b)

· 3 percent of prime and subcontracts for service-disabled veteran-owned Small Businesses ($6b)

In addition to the goals established, the Small Business Act 15(g)(1) also states that it is the policy of the United States that each agency shall have an annual goal that represents, for that agency, the maximum practicable opportunity for small or otherwise disadvantaged business concerns.

... mean Small Business Contracting Opportunities

There are both contracting and subcontracting opportunities available for Small Businesses that have established a relationship with the Federal Government.

Government Prime Contracting Set-Asides

The Small Business Act authorizes federal agencies to conduct procurements that are exclusively reserved for Small Businesses called ''Small Business set-asides.'' The purpose is "to provide maxim practicable opportunities in federal acquisitions to Small Businesses." It gives Small Businesses an opportunity to bid on contracts without having to compete with those enormous firms whose resources far outstrip their own.

There are three different program-types under which such set-asides are authorized for Small, but otherwise non-disadvantaged, Businesses. Understanding how these programs work may provide increased opportunities for many Small Businesses.

  1. The Small Business Reserve is a statutory provision, implemented in the Small Business Set-Aside Program (SBSA).

· It requires all agency purchases valued between $2,500 and $100,000 be reserved exclusively for Small Businesses. This upper limit is called the Simplified Acquisition Threshold.

· It applies when there are two or more ''responsible'' Small Businesses that can satisfy the agency's requirement at a fair market price.

· Contracts in this dollar range are made using simple procedures that make it easier for Small Businesses to participate.

· Set-asides above the Simplified Acquisition Threshold apply to all procurement opportunities valued above $100,000.

· In this case also, the set-aside is appropriate when two or more responsible Small Business sources are available to meet the government's needs.

· These transactions are subject to more complicated procedures.

· Set-asides for a portion of a contract may be awarded, where a total set-aside is impossible for specific reasons. (This is the exception to total set-asides and not preferred practice.)

For more information on Small Business set-asides and Acquisition Procedures, please visit our FAQs on that subject.

  1. The Small Business Competitive Demonstration Program aims

· to assess the open competition of Small Businesses and large businesses in certain industry groups; and

· to expand Small Business participation on other targeted industry groups through the use of set-asides

· If a purchase is being made in one of the designated industry groups,

o agencies are required to use open competition as long as the annual Small Business participation in that industry group equals 40% of the agency's contract dollars.

o If the participation falls below 40%, the agency is authorized to conduct Small Business set-asides until a 40% level of participation is achieved.

  1. Other set-asides exist as part of programs designed for firms that qualify as Small, Disadvantaged Businesses.

Sub-Contracting with Prime Contractors

Subcontracting or teaming with a prime contractor can be a profitable experience as well as a growth opportunity for your business. Subcontracting benefits a Small Business both in substance and in image. The experience gained from performing as a subcontractor can assist you in responding to solicitations as a prime contractor and it can enhance your competitiveness as a prime contractor.

Over the years, several laws have been passed regarding subcontracting to Small Businesses. These laws require prime contractors having contracts that exceed the simplified acquisition threshold to provide maximum practicable subcontracting opportunities to small, or otherwise disadvantaged, businesses.

These laws, among other things, require that:

  • On contracts more than $100,000 simplified acquisition threshold, prime contractors are required to make a "best effort' attempt to make use of small, disadvantaged, and women-owned Small Businesses as subcontractors if the opportunity exists under the contract.
  • On contracts more than $500,000 (or $1,000,000 for construction of a public facility) large contractors and subcontractors submit subcontracting plans containing specific percentage goals for Small Businesses, HUBZone Small Businesses, small disadvantaged businesses, and women-owned Small Businesses.
  • Subcontracting plans contain a description of the methods and efforts used to assure that Small Business enterprises have an equitable opportunity to compete for subcontracts.
  • Subcontracting plans be submitted by contractors for review prior to the award of any contract; failure to comply in good faith with its approved plan may subject the contractor to liquidated damages or termination for default.

In addition, the Federal Government provides substantial monetary incentives to large, prime contractors to award sub-contracts to small, or otherwise disadvantaged, firms.

NB Subcontract requirements are not applicable to contracts whose work is performed outside of the territorial limits of the United States, although financial incentives for such subcontracting may still be applied.

Other Small Business Programs

Yet other federal procurement programs exist for Small Businesses. These programs address the areas of contractor responsibility, innovation research, and technology.

  1. The Certification of Competency Program (COC) requires the government to purchase goods and services from responsible contractors.

· ''Responsibility'' means that the contractor has the necessary

o capacity,

o financial resources,

o business acumen, and

o required eligibility to perform a federal prime contract.

· The COC program allows a Small Business to appeal a contracting officer's determination that it failed to demonstrate responsibility with regard to a specific government contract on which it is the apparent low bidder.

· When the Small Business applies for a COC, SBA industrial and financial specialists conduct a detailed review of the firm's capabilities to perform on the contract. If the business demonstrates the ability to perform, the SBA issues a COC to the contracting officer requiring the award of that specific contract to the Small Business.

  1. Under the Small Business Innovation Research (SBIR) Program, federal agencies having annual research and development budgets in excess of $100 million will set aside 2.5% for awards to small high-technology firms. These agencies make decisions based on a firm's qualifications, degree of innovation, technical merit, and future market potential.
  1. Under the Small Business Technology Transfer Program (STTP), federal agencies having annual research and development budgets of more than $1 billion will set aside a certain percentage for awards to small high-technology firms that collaborate with non-profit research institutions. These agencies make decisions based on qualifications, degree of innovation, technical merit, and future market potential.

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Central Contractor Registration (CCR)

This section introduces the CCR.

· The CCR home page is http://www.ccr.gov .

A. General Information

  1. What is the CCR?

The Central Contractor Registration (CCR) is the primary vendor database for the U.S. Federal Government. The CCR collects, validates, stores and disseminates data in support of agency acquisition missions.

Both current and potential government vendors are required to register in CCR in order to do be awarded contracts by the government. Vendors are required to complete a one-time registration to provide basic information relevant to procurement and financial transactions. Vendors must update or renew their registration annually to maintain an active status.

CCR validates the vendor's information and electronically shares the secure and encrypted data with the federal agencies' finance offices to facilitate paperless payments through electronic funds transfer (EFT). Additionally, CCR shares the data with government procurement and electronic business systems.

  1. Who should register?
    1. Any firm seeking to become a prime contractor. Sub-contractors are not required to register, although they ought to if they consider ever bidding for a prime contract.
    2. Any Small Business, because registration in the SBA PRO-Net is now accomplished through registration in the CCR.
  1. Do I need to register in programs other than CCR?

You do not have to register in SBA databases (e.g., PRO-Net). Registering in CCR is sufficient: all your data will populate the SBA databases, and you will be directed to special SBA supplemental pages as long as you check 'Small Business' under BUSINESS TYPE in the CCR.

Please note that if you are interested in receiving Small Disadvantaged Business, HUBZone, or 8(a) certifications, you will need to refer separately to SBA to complete that process. Registering in the CCR, however, may be first step in those certification processes.

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Small, Disadvantaged Business (SDB) Program Benefits

If you are able to certify your business as a Small, Disadvantaged Business, the benefits to you involve both prime contracting and subcontracting opportunities.

(Click here for pre-qualification information.)

  1. SBA certifies SDBs to make them eligible for special bidding benefits, over and above standard Small Business set-asides.

This is the Price evaluation adjustment: qualified SDBs receive a price evaluation adjustment of up to 10 percent on procurements in competitive acquisitions over the simplified acquisition threshold (usually $100,000).

This applies to most SIC Major Groups and regions (which requires authorization by U.S. Department of Commerce benchmarks). The price evaluation adjustment does not apply to 8(a) acquisitions and Small Business set-asides.

  1. Evaluation credits available to prime contractors boost subcontracting opportunities for SDBs.

This is the Evaluation factor: qualified prime contractors can receive a credit when using SDBs as subcontractors on procurements from competitive negotiated acquisitions over $500,000, or $1,000,000 in construction. All SDBs must be certified by the SBA.

The evaluation factor does not apply to Small Business set asides, 8(a) acquisitions, or contracts performed entirely outside the United States. The evaluation factor for SDB participation allows credit for subcontractors in the SIC codes authorized by the US Department of Commerce benchmarks. Once certified, firms remain on the SBA's list of SDB-certified firms for a period of three years.

  1. There is also a source selection evaluation factor or subfactor, which each agency develops in order to evaluate SDB participation in subcontracts. This is designed as a safeguard to ensure that every possible opportunity is made available to SDBs.

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8(a) Program

The 8(a) Business Development Program is designed to provide business assistance and training to help socially and economically disadvantaged American citizens gain access to the economic mainstream of American society. The program is named for the section of the Small Business Act that authorizes its policies and procedures.

Participation is divided into two phases over nine years: a four-year developmental stage and a five-year transition stage. In fiscal year 1998, more than 6,100 firms participated in the 8(a) Program and were awarded $6.4 billion in Federal contract awards

Eligibility and Certification Requirements

To qualify for the program, a firm must undergo certification by the SBA.

The SBA uses the following general standards to decide on certification:

  1. A Small Business must be owned and controlled by a socially and economically disadvantaged individual

· presumed groups include African Americans, Hispanic Americans, Asian Pacific Americans, Native Americans, and Subcontinent Asian Americans

· Other individuals can be admitted to the program if they show through a "preponderance of the evidence" that they are

o disadvantaged because of race, ethnicity, gender, physical handicap, or residence in an environment isolated from the mainstream of American society.

· In order to meet the economic disadvantage test, all individuals must have a net worth of less than $250,000, excluding the value of the business and personnel residence.

  1. Successful applicants must also

· meet applicable size standards for Small Business concerns;

· be in business for at least two years;

o the two year requirement can be waived

· display reasonable success potential; and

· display good character

  1. The SBA monitors 8(a) companies annually for continued compliance with these

requirements

Benefits of the 8(a) Program

The 8(a) program, in general, provides specialized business training, counseling, and the ability to obtain contracts through sole-source and restricted competition procedures.

· Participants hold a privileged position in the line for Federal Contracts set aside for Small Businesses, under the Simplified Acquisition Procedures.

· Participants can receive sole-source contracts, up to a ceiling of $3 million for goods and services and $5 million for manufacturing. While the 8(a) program helps firms build their competitive and institutional know-how, it also encourages them to participate in competitive acquisitions.

· Federal acquisition policies encourage Federal agencies to award a certain percentage of their contracts to SDBs. To speed up the award process, the SBA has signed Memorandums of Understanding (MOUs) with 25 Federal agencies allowing them to contract directly with certified 8(a) firms.

· Recent changes permit 8(a) firms to form joint ventures and teams to bid on contracts. This enhances the ability of 8(a) firms to perform larger prime contracts and overcome the effects of contract bundling (that is, the combining of two or more contracts together into one large contract).

· Also recently implemented is the Mentor-Protégé Program that allows starting 8(a) companies to learn the ropes from experienced businesses.

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Are you a Small, Disadvantaged Business?

  • Specific contract goals are established for certain other types of Small Businesses,

and

  • Such businesses often receive first shot at contracts set aside for Small Businesses.

a) Small woman-owned businesses should receive 5% of all government buys.

A woman-owned business is defined as a business that is owned and controlled 51% or more by a woman or women. Currently, a woman-owned certification process is not required for federal contracts. When submitting a proposal, simply self-certify by checking the appropriate box

b) Small disadvantaged businesses should receive 5% of all government buys.

A small disadvantaged business is defined as a firm that is 51% or more owned, controlled, and operated by a person(s) who is socially and economically disadvantaged. African Americans, Hispanic Americans, Asian Pacific Americans, Subcontinent Asian Americans, and Native Americans are presumed to qualify. Other individuals can qualify if they show by a " preponderance of the evidence" that they are disadvantaged. You must certify this status with the government by application.

Follow this link for more information about opportunities for SDBs.

c) Small service-disabled veteran-owned businesses should receive 3% of all government buys.

A service-disabled business is defined as a business that is owned 51% by one or more service-disabled veterans. The Veterans Administration confirms disability. Go to the Department of Veteran Affairs at http://www.va.gov.

d) There may also be opportunities for small veteran-owned businesses.

A veteran-owned business is defined as a business that is owned 51% by a veteran(s). There is no veteran-owned certification process to complete, simply self-certify.

e) Small HUBZone businesses should receive 3% of all government buys.

HUBZone is defined as a "Historically Underutilized Business Zone". Certified Small Business firms will have the opportunity to negotiate contracts and to participate in restricted competition limited to HUBZone firms.

Follow this link to learn whether you may qualify as a HUBZone business.

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HUBZone opportunities

All federal departments and agencies are expected to meet HUBZone contract goals. It is expected that more than $6b will be available this fiscal year.

1. What benefits are Small Businesses receiving under this program?

Generally speaking, there are two levels of benefit. The first relates directly to Federal contracts, while the second involves specialized assistance.

Federal Contract Benefits

There are 4 types of HUBZone contract opportunities:

1. Competitive HUBZone contracts can be awarded if the contracting officer has a

reasonable expectation that

  • at least two qualified HUBZone Small Business concerns (SBCs) will submit offers; and
  • that the contract will be awarded at a fair market price.

2. Sole-source HUBZone contracts can be awarded if the contracting officer determines

that:

  • one qualified HUBZone SBC is responsible to perform the contract;
  • two or more qualified HUBZone SBCs are not likely to submit offers; and
  • the anticipated award price of the proposed contract, including options, will not exceed:
    • $5,000,000 for a requirement within the North American Industry Classification System (NAICS) code for manufacturing or
    • $3,000,000 for a requirement within all other NAICS codes.

3. Full and open competitive contracts can be awarded with:

a price evaluation preference as long as:

  • the offer of the HUBZone Small Business must not be 10 percent higher than the offer of a non-Small Business.

4. Subcontracting: All subcontracting plans for large business Federal contractors must

include a HUBZone subcontracting goal.

Other Benefits

  • Eligible HUBZone firms can qualify for higher SBA-guaranteed surety bonds on construction and service contract bids.
  • Firms in Empowerment Zones and Enterprise Communities (EZ/EC) can also benefit from employer tax credits, tax-free facility bonds, and investment tax deductions.

2. How does the HUBZone program work?

The US Small Business Administration (SBA) regulates and implements the program and

  • determines which businesses are eligible to receive HUBZone contracts,
  • maintains a listing of qualified HUBZone Small Businesses that Federal agencies can use to locate vendors,
  • adjudicates protests of eligibility to receive HUBZone contracts, and
  • reports to the Congress on the program's impact on employment and investment in HUBZone areas.

3. How are contracts awarded under the HUBZone program?

  1. Your concern must first meet HUBZone eligibility requirements,
  1. Be certified by the U.S. Small Business Administration (SBA) as a qualified HUBZone Small Business, and
  1. Be listed on SBA's 'List of Qualified HUBZone SBCs' and in SBA Supplemental Page database

4. Does my Business qualify as a HUBZone business?

These are the standards for pre-qualification for a HUBZone business:

  • It must be a Small Business by SBA size standards;
  • Its principal office must be located within a HUBZone, which includes lands on federally recognized Indian reservations;
  • It must be owned and controlled by one or more U.S. citizens (N.B.-this means any level of ownership in an applicant Small Business by another company would result in a decline). Approved ownership can also be by a Community Development Corporation or Indian tribe; and
  • At least 35% of its employees must reside in a HUBZone.

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Important Disclaimer - The contents of this publication are for informational purposes only and are not to be relied upon as legal advice. The Bayne Law Group LLCSM disclaims the accuracy of any and all information contained within the content of this publication. You should not rely upon any information contained within this publication but instead should either consult with the Attorneys of The Bayne Law Group LLCSM concerning your specific inquiry in writing or consult with your own legal counsel. No information contained within this site is warranted as accurate and The Bayne Law Group LLCSM is not responsible for any situation in which a person relies upon information posted within this website. Your review and use of this website is expressly conditioned upon this clear understanding of disclaimed responsibility.

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