Washington Metropolitan Area District Office SBA’s Business Development and Contracting Programs
Washington Metropolitan Area District Office
SBA’s Business Development
and Contracting Programs
Washington Metropolitan Area District Office
Small Business Act, 1953
“It is the Declared Policy of the Congress…to insure that a fair proportion of the total purchases and contracts or subcontracts for property and services for the Government be placed with small business enterprises.”
Washington Metropolitan Area District Office
Federal Procurement
$500 Billion $500 Billion ++
per yearper year
U.S. Government:
The World’s Largest
Customer
Federal Federal Contracts =Contracts =
Washington Metropolitan Area District Office
Federal Procurement
Small Businesses: 23%
Service-Disabled Vets: 3%
SDB: 5%
Women-owned: 5%
HUBZone: 3%
PROCUREMENT TARGETS:
$500 Billion $500 Billion ++
per yearper year
Washington Metropolitan Area District Office
• District of Columbia• Montgomery County, MD• Prince George’s County, MD• Fairfax County, VA• Loudoun County, VA• Arlington County, VA
• City of Alexandria, VA
• City of Fairfax, VA
U.S. Small Business AdministrationWashington Metropolitan Area District
Washington Metropolitan Area District Office
What part does the SBA playin procurement?
1. Keeping Score:
SBA negotiates annual procurement goals with each Federal agency
Ensures that the combined goals > 23%
Reviews each agency’s results
Issues annual Small Business Procurement Scorecard for entire Federal Government
Washington Metropolitan Area District Office
2. Counseling and Training:
Procurement training and matchmaking events.
Resource Partners help business owners find and bid on procurement opportunities.
Resource Partners include: SCORE, SBDC, WBC.
What part does the SBA playin procurement?
Washington Metropolitan Area District Office
3. Certification
SBA-Certified:
HUBZone Empowerment Contracting Program
8(a) Business Development Program
Self-Certified:
Small Disadvantaged Business
Service Disabled Veteran-Owned Business
Women-Owned Small Business
What part does the SBA playin procurement?
Washington Metropolitan Area District Office
SBA-Certified Contracting Programs
HUBZone Empowerment Contracting Program
8(a) Business Development Program
Washington Metropolitan Area District Office
HUBZoneEmpowerment Contracting Program 13CFR Part 126
Designed to stimulate economic
development and create jobs in urban and
rural communities.
HUBZone = Historically Underutilized Business
Zone
Washington Metropolitan Area District Office
HUBZone Empowerment Contracting Program
HUBZone contracts are awarded to a qualified HUBZone Small Business Contractor (SBC) through any of the following means:
Set-aside awards based on competition restricted to qualified HUBZone SBCs.
Awards to qualified HUBZone firms through full and open competition after a price evaluation preference in favor of qualified HUBZone SBCs (10%, where price is considered an evaluation factor).
Washington Metropolitan Area District Office
HUBZone Requirements
Must be a SMALL business
Concern must be owned and controlled only by US citizens
Principal office of the concern must be located in a HUBZone; and
At least 35% of the concern’s employees must reside in a HUBZone
Washington Metropolitan Area District Office
8(a) Business Development Program 13CFR Part 124
Helps eligible small socially and economically disadvantaged businesses
grow and become sustainable.
Training in business management & marketing
Opportunities to team with other companies
Washington Metropolitan Area District Office
8(a) EligibilityUnited States citizen
Socially & economically disadvantaged
Own unconditionally at least 51% of concern
Control & manage concern on full-time basis
Good character - not debarred, suspended, parole or probation
Registered in System for Award Management (SAM) database
Two (2) years business history in primary industry classification, as shown with tax returns (may sometimes be waived)
Business must be small per SBA’s size standards
Washington Metropolitan Area District Office
Who is Socially and Economically Disadvantaged?
Socially disadvantaged persons have been subjected to racial or ethnic prejudice or cultural bias because of their identities as members of groups.
People are economically disadvantaged if they are socially disadvantaged and their ability to compete in the free enterprise system has been impaired due to diminished access to capital and credit.
Washington Metropolitan Area District Office
SBA will examine:Personal income for the past three
yearsPersonal net worthFair market value of all assetsSpouse’s financial condition, in certain
circumstances
Determining Economic Disadvantage
Washington Metropolitan Area District Office
Program enrollment = 9 years
Program participation divided into 2 stages:Year 1 – 4 Developmental
Year 5 - 9 Transitional
Must maintain eligibility throughout enrollment
8(a) Business Development Program
Washington Metropolitan Area District Office
New Suspension RuleFor Military Service
If the disadvantaged individual owner(s) of the 8(a) firm are called to active military status, SBA will no longer terminate the firm.(13 CFR 124.305)
Firm may elect to: be suspended from program participation until original owner returns from duty (nine-year clock stops during suspension, resumes from that point), or
continue participation if another disadvantaged individual(s) assumes control of the firm
Washington Metropolitan Area District Office
Size for Primary NAICS Code
Firm must generally remain small. SBA may graduate a participant prior to the expiration of its program term if firm does not remain small, as adjusted, for three successive program years.
Washington Metropolitan Area District Office
Reporting on Performance of Work
Requirements
Annual Review: Participant must demonstrate how it is meeting the performance of work requirements for each 8(a) contract that it is performing as part of a JV
8(a) Contract: At the completion of every 8(a) contract awarded to a JV, the Participant must explain how Performance of Work Requirements were met
Washington Metropolitan Area District Office
Completion of Program Term
A concern may leave the program by:
Expiration of the program term (Nine years)Voluntary withdrawal or voluntary early
graduationGraduation (13 CFR 124.302)Early graduation (13 CFR 124.302 and 304)Termination (13 CFR 124.303 and 304)
Washington Metropolitan Area District Office
Joint Ventures: Structure
Requirements tightened for joint ventures (JV) so that non-disadvantaged firms do not unduly benefit from the 8(a) program
JV agreement may be informal or formal (separate business structure) but must be in writing
Can be unpopulated or populated (JV employs separate employees). Rules are different for each.
Washington Metropolitan Area District Office
Joint Ventures:
Generally may not be awarded more than three contracts over a two year period, starting from the date of the award of the first contract, without the partners to the JV being deemed affiliated for all purposes. (13 CFR 121.103)
Same entities may create additional JVs and each new joint venture entity may be awarded up to 3 contracts.
Washington Metropolitan Area District Office
Mentor Protégé Program
Non-profits can be Mentors Mentor can have up to 3 protégés at one timeA firm cannot be both a Protégé and a Mentor at
the same timeProtégé can have second Mentor, corresponding
to an unrelated, secondary NAICS code Assistance provided by the Mentor must be tied
to the Protégé’s SBA-approved business planSBA prohibited from approving a new
Mentor/Protégé relationship within six months of the end of an 8(a) Participant’s program term
Washington Metropolitan Area District Office
Mentor/Protégé Agreement must be approved by SBA before the firms can submit a JV offer on a procurement as a small business
In order to receive the exclusion from affiliation on any 8(a) or non-8(a) contracts, the agreement must comply with all 8(a) JV requirements
SBA approved Mentor/Protégé joint ventures are small for federal contracts
Contracting benefits derived from Mentor/Protégé relationship end once the protégé leaves the 8(a) program
Mentor Protégé Program
Washington Metropolitan Area District Office
Failure to Provide Assistance
Consequences if Mentor does not provide agreed-to assistance:
SBA may terminate the Mentor/Protégé AgreementMentor is ineligible to participate for 2 yearsSBA may recommend a stop work order for each contract
the Mentor and Protégé are performing as a JV and where they have received the exclusion from affiliation
SBA may authorize substitution of protégé firm for the JVMay constitute grounds for Government-wide suspension
or debarment
Washington Metropolitan Area District Office
Self-Certified Contracting Programs
Small Disadvantaged Businesses (SDB)
Service-Disabled Veteran-Owned Businesses(SDVOB)
Women-Owned Small Businesses (WOSB)
Washington Metropolitan Area District Office
Small Disadvantaged Business (SDB) Program
Self-certifying program as of October 2008
Subcontracting opportunities
SDBs are eligible for special bidding benefits
Prime contractors get credit towards
small business goals for using SDBs as subs
Washington Metropolitan Area District Office
SDB Eligibility Criteria
Similar to 8(a), except higher allowable Net Worth
After excluding the individual’s equity in the firm and equity in the primary residence, net worth may not exceed $750,000.*
Net Worth
less equity in primary residence
less equity in business equals adjusted net worth
(which must not exceed $750,000 )*when married, separate statements from each spouse to show each individual’s joint or community property shares and separate property.
Washington Metropolitan Area District Office
Service-Disabled Veteran-Owned Business (SDVOB) Program
Self-certifying program
SDVOBs are eligible to bid on set-aside contracts
Subcontracting opportunities
Prime contractors get credit towards
small business goals for using SDVOBs as subs
Washington Metropolitan Area District Office
SDVOB Program:Who is Eligible?
Size: Must be small according to SBA standards
Ownership: Must be at least 51% directly and unconditionally controlled by one or more service disabled veterans
Status: Owners(s) must have Form DD-214 indicating honorable discharge
Washington Metropolitan Area District Office
Women-Owned Small Business (WOSB)Program 13CFR Part 127
Program Started February 2011
Firms self-certify as Women-Owned Small Businesses
(WOSB), or Economically-Disadvantaged Women-
Owned Small Businesses (EDWOSB)For 83 target industries (NAICS codes) where
WOSBs are under-represented, contract officers may set-aside contracts for WOSBs or EDWOSBs
only (under specific circumstances)
Washington Metropolitan Area District Office
WOSB Program: Who is eligible?
Size: Must be small according to SBA size standards
Ownership: Must be at least 51% directly and unconditionally owned by a woman or women
Citizenship: Majority owner or owners must be U.S. citizens
Management: Control and day-to-day management must be in hands of a woman or women
Washington Metropolitan Area District Office
WOSB Program: EDWOSB
An Economicallly-Disadvantaged Woman-Owned Small Business (EDWOSB) is a WOSB which is owned by a woman or women whose:
Personal Net Worth < $750,000
Average Annual Income < $350,000 (preceding 3 year average)
Total Assets < $6,000,000 (including primary residence and business)
Washington Metropolitan Area District Office
WOSB Program: Set-asidesI. RAND Study (2007) = 83 Designated NAICS Codes:
45 NAICS Codes = Women-owned businesses “under-represented” Competition may be restricted to certified EDWOSBs
38 NAICS Codes = Women-owned businesses “substantially under-represented” Competition may be restricted to ALL CERTIFIED WOSBs
II. Award < $3 million ($5 million for manufacturing)
III. “Reasonable expectation” of two or more WOSBs or EDWOSBs bidding
IV. “Fair and reasonable” price
Washington Metropolitan Area District Office
WOSB Program: Certification
Self-Certification:•Register and enter data in SAM (System for Award Management) www.sam.gov
•Submit documents to SBA’s WOSB Program Repository See www.sba.gov/wosb for details
Third Party Certification:SBA has approved several third-party certifiers.
Washington Metropolitan Area District Office
For More InformationFor More InformationContact your
Washington Metropolitan Area District Office:
www.sba.gov/dcor
202-205-8800