2. 1 “Government Contracting: Trends, Assistance & Updates” S S. Brent Owens, Procurement Center Representative (PCR) FAR 19.4

3. Overview 2  Small Business Administration (SBA) & the PCR  Trends in Government Contracting  SBA Prime Contractor Assistance:  Small Business Goals  Set Asides  Certificate of Competencies  Size Protests  NAICS Code Appeals  SBA Subcontracting Assistance  Regulatory Updates  Limitations on Subcontracting  Non-Manufacturer Rule  Joint Ventures  Woman Owned Small Business  Mentor-Protégé Program  Others  Websites

4. About the SBA 3  Independent agency of the federal government  Aid, counsel, assist, protect interests of small business concerns  Strengthen the overall economy of our nation  Help Americans start, build and grow businesses  District and Government Contracting Offices

5. More about the SBA 4  Technical Assistance  Financial Assistance  Disaster Recovery Assistance  Government Contracting Assistance

6. The Procurement Center Representative  SBA employee assigned to a geographical area  Assigned to multiple government buying activities  Coordinates with contracting activities on procurements*  Recommend appropriate small business set-asides*  Review consolidation and bundling cases  Review subcontracting plans  Perform Surveillance Reviews  Counsel small businesses  Counsel and train federal agencies *PCRs have statutory appeal authority! 5

7. Trends (one PCRs perspective) 6  Strategic Sourcing (endorsed on high) GSA’s Government Wide Acquisition Contracts (Stars II, Alliant, OASIS, VETS, Environmental Quality…) Air Force: (NETCENTS, DESP, CFT, F2AST, A&E, Roofing,...) Army: (CHESS, SBS, WFF, ARLIII, TEISIII…)

8. Trends (continued) 7  Consolidation/Bundling  Lowest Price Technically Acceptable  Continual refinement…  Industry Input needed  Increase in Small Business/Socioeconomic Set-Aside Opportunities  Small Business awards increasing. Goals are being met!  Subcontracting goals/achievements increasing  Regulatory updates geared towards helping small business

9. SBA Prime Contractor Assistance 8  Small Business Act  Implements Congressional Policy to aid, counsel, assist & protect the interests of small business concerns  Goal of policy is to ensure that a fair proportion of purchases, contracts & subcontracts be placed with small businesses http://www.sba.gov/library/lawroom.html

10. Current National Policy 9 “It is the policy of the Government to provide maximum practicable opportunities in its acquisitions to small business….” FAR 19.201(a)

11. Prime Contractor Assistance: Federal-Wide Statutory SB Goals 10  23% of prime contracts for small business  5% of prime and subcontracts for SDB  5% of prime and subcontracts for WOSB  3% of prime contracts for HUBZone  3% of prime and subcontracts for SDVOSB

12. How are Goals Established? 11  Established for federal agencies as percentages of annual expenditures  Agencies must submit their goals to the Small Business Administration (SBA)  SBA approves final goals and monitors the agency’s actual performance against those established goals https://www.sba.gov/content/small-business-goaling

13. Comparison of SB Goals 12 Hill AFB (Air Base Wing)50% Nuclear Warfare Center2% FE Warren AFB70% WY National Guard61% National Park Service (NR MABO)53% Bureau of Reclamation53% (Goals are based upon unique missions of each government agency, buying activity)

14. Prime Contractor Assistance: Small Business Set-Asides 13  Federal procurements restricted to participation by only small businesses  Types of Set-Asides:  General Small Business (SB) (all types)  HUBZone SB  8(a) SB  Service Disabled Veteran Owned SB  Women Owned SB

15. “The Rule of Two” 14 $3,000-$150,000:“Automatically reserved exclusively for small business…” Over $150,000:Shall be set aside for small business when there is a reasonable expectation that: “(1) offers will be obtained from at least two responsible small business concerns…” “(2) award will be made at fair market prices…” FAR 19.502-2

16. “Responsible” 15  Adequate financial resources*  Comply with delivery schedule  Satisfactory past performance  Integrity  Technical skills*  Necessary equipment*  Comply with Limitation on Subcontracting *or the ability to obtain

17. 16

18. Small Business Set-Asides 17  Types of Set-Asides:  Is there an Order of Preference?  General Small Business (SB) (all types)  HUBZone SB  8(a) SB  Service Disabled Veteran Owned SB  Women Owned SB

19. Order of Consideration 18 The set-aside approach is at the discretion of the contracting officer based on several factors:  Previous procurement history  Results of market research  Input from Agency SB specialist  How agency is doing in meeting its SB goals  Jobs Act of 2010 established “Parity”

20. How can you influence? 19 Market Research is the key to selecting the appropriate acquisition approach  Sources Sought Synopsis (FBO)  Requests for Information  Industry Days  SAM database Searches  Capability Briefings  Contact your PCR

21. Small Business Set- Asides for Manufactured Items 20  Manufacturer  Non-Manufacturer Rule  Non-Manufacturer Rule Waivers  Exceptions

22. Manufacturer (for SBSA) 21  A concern which, with its own facilities, performs the primary activities in transforming inorganic or organic substances, including the assembly of parts and components, into the end item being acquired  End item must be manufactured or produced in the United States  Must be small within the size standard of the assigned NAICS code  Must comply with the Limitation on Subcontracting  50% of the cost of manufacturing, excluding materials

23. Non-Manufacturer Rule (Distributors) 22  An exception to the performance requirements (Limitations on Subcontracting)  A non-manufacturer may qualify as a small business on a supply contract set aside for small business if: 1. Does not exceed 500 employees 2. Is primarily engaged in the business and normally sells the item 3. Takes ownership or possession of item consistent with Industry 4. Will supply the item of a small business manufacturer

24. Non-Manufacturer Rule Waivers 23  The requirement that a non-manufacturer supply the product of a small business concern may be waived by the SBA when there are no small business manufacturers available to supply the item to the government  Waivers are identified by NAICS codes and GSA’s Product and Service Codes (PSC)  Listing of Class Waivers: www.sba.govwww.sba.gov  All other requirements of NMF Rule apply

25. Non-Manufacturer Rule 24  The NMF rule does not apply to service contracts  NMF waivers are not granted for HUBZone procurements  NMF waivers cannot be granted after bids/offers on a solicitation have been received  Exception to rule: Procurements under $25,000 as long as the product is manufactured IAW Buy American Act etc.

26. Prime Contractor Assistance: Certificates of Competency 25 When determined to be non-responsible, a small business is entitled to an independent review by the SBA. 1.Small Business in line for award must apply for a COC 2.SBA will review application and make a final decision of “Responsibility” 3.Contracting Office must adhere to SBA decision Capacity, Credit, Capability, Competency, Integrity, Perseverance & Tenacity, Limitations on Subcontracting.

27. Prime Contractor Assistance: Size Determinations Firm must:  Meet size standard for NAICS code specified in solicitation  Self-certify size status  Be small at time of self-certification If Questioned, Protest must be:  Specific to a buy  Received in a timely manner  Forwarded to Area Director for formal determination. 26 Contract award suspended until SBA makes a formal size determination (generally within 15 days). Determinations may be appealed to the Office of Hearings and Appeals (OHA)

28. Subcontracting Assistance 27 SBA’s Role in Subcontracting: Pre-Award Subcontracting Plan Reviews  SBA’s PCRs review subcontracting plans prior to contract award (advisory) Post-Award Compliance Reviews  SBA monitors goal achievement after contract award (eSRS, audits)

29. Subcontracting Program (“The Basics”) 28  When  Contracts > $700K ($1.5M construction) AND subcontract opportunities exist  Modifications > $700K ($1.5M construction) with new work AND subcontract opportunities exist  Multi-year contracts / contracts with options o Cumulative value of base contract & all options o Separate goals for base & each option Goals should reflect “maximum practicable opportunities”

30. Subcontracting Program (“The Basics”) Who  ALL other than small business: Large Business State and local government  May also include: Public utilities Educational institutions Foreign-owned firms Goals should reflect “maximum practicable opportunities” 29

31. Subcontracting Plans 30  Reviewed by Contracting Officer, SBA  Approved by Contracting Officer  Incorporated into contracts  Monitored by the Contracting Officer, SBA  Consequences for not meeting goals?

32. Subcontracting Plans 31  Consequences for not meeting subcontracting goals (breach of contract terms):  Liquidated Damages may be assessed  Contractor performance rating may be affected  Increased SBA oversight on agency and contractor

33. Regulatory Updates (National Defense Authorization Acts)  Limitations on Subcontracting  Non-Manufacturer Rule  WOSB Program Changes  Mentor-Protégé Program (Non-DoD)  Joint Venture Exceptions  PTAC- Advisory Size Determinations  Subcontracting-Tiers 32

34. Limitations on Subcontracting (NDAA 2013 Proposed Rule) (Current) Services: 50% of the labor costs Supplies: 50% of the labor costs Construction: 15% or 25% of the labor costs (Revised) Services: 50% of the amount paid to the concern* Supplies: 50% of the amount paid to the concern* Construction: 15% or 25% of the amount paid to the concern* * Amounts exclude cost of materials *Amounts exclude amounts expended by “similarly situated” entities at any tier (LOS does not apply to small business set-asides below $150,000) 33

35. Non-Manufacturer Rule (NDAA 2013 Proposed Rule) (Current) Exception to the Rule: Anticipated cost of contract is less than $25,000 (Revised) Exception to the Rule: Anticipated cost of contract is less than $150,000 A firm can supply the product of any size business without regard to the place of manufacture. However, any SBA waiver or exemption has no effect on requirements external to the Small Business Act which involve domestic sources of supply, such as the Buy American Act or the Trade Agreements Act 34

36. Joint Venture Affiliation Exclusions (NDAA 2013 Proposed Rule) (Current) Joint Venture Members are not considered affiliated under these two conditions: 1. Bundled procurement of any dollar value 2. Large procurements: A. Greater than ½ the size standard for Services B. Over $10M for Supplies (Revised) Joint Venture Members are not considered affiliated as long as each member is small to the solicitation NAICS code size standard. (Excessive JVs between firms can result in affiliation) 35

37. Woman Owned Small Business (FAR 19.1506) (Previous) Set asides available to all eligible WOSBs No sole source authority (Current) Sole Source award available under these conditions:  Designated NAICS codes  Contracting Officer has determined that there is not a reasonable expectation of receiving 2 or more offers from WOSB or EDWOSB  Price determined to be fair and reasonable  Contracting Officer has obtained a Justification and Approval IAW FAR Part 6  Estimated value does not exceed $4M for services or $6.5M for supplies 36

38. Mentor-Protégé Program (Current)  Limited to only 8(a) business development program participants (Proposed)  Open and available to all small businesses  Program shall be identical to 8(a) program…  SBA authorizes programs with other agencies (except DoD)  JV must be in writing  JV may not be populated (other than administrative personnel)  SBA approves agreements  Duration: up to 3 years, with one 3 year extension  Size of JV may still be protested  More to come… 37

39. Other NDAA Updates PTAC can provide “Advisory” Size Determinations  Not binding in a formal size protest  No criminal violations if contractor relied upon, in good faith  Small business concern may rely on PTAC decision until SBA issues a decision stating otherwise Subcontracting: Goals/Achievements  Current: Only subcontracting at the 1 st tier can be counted  Proposed: Subcontracting at any tier can be counted 38

40. Websites Small Business Administration: sba.gov Federal Business Opportunities: fbo.gov Federal Acquisition Regulations: farsite.hill.af.mil Code of Fed Regulations: ecfr.gpoaccess.gov System for Award Management: sam.gov Dynamic Small Business Search: dsbs.sba.gov Federal Procurement Data System: fpds.gov Office of Small Business Program: osdbu.go USA Spending: USASpending.gov 39

41. Contact Information 40 S. Brent Owens U.S. Small Business Administration Government Contracting, Area VI 6038 Aspen Ave, Building 1289 CE Hill AFB, UT 84056-5805 (801) 775-4141 brent.owens@hill.af.mil