Revenue-based small business size standards to increase on July 14

July 8, 2014 by

You probably know that the federal government’s definition of a small business is based on either the number of people that a company employs or the amount of revenue it earns annually.  The number-of-employees or the gross-revenue standards are applied to individual North American Industrial Classification System (NAICS) codes.  One or more NAICS codes apply to every business.

Thus, in order to determine whether a company is a small business in the eyes of the government, one must first determine which NAICS code or codes apply to the business, and then see what size standard (employees or revenue) applies to each NAICS code.  If a business has fewer employees or earns less annual revenue (averaged over the past three years) than the standard, then that business can represent itself to the federal government as a small business.  This is an important determination to make since the federal government sets an annual goal of awarding 23 percent of its contract dollars to small businesses.

It’s been more than five years since the Small Business Administration (SBA) updated the revenue size standards for small businesses.  Therefore, as of July 14, 2014, the SBA is adjusting virtually all of its size standards that are based upon revenue, to account for the years of inflation since the last adjustment. 

The forthcoming adjustment affects almost half of all NAICS code categories.    In all,  476  industrial categories will be affected by the update,  including most service, construction, retail, agricultural and transportation industries. 

With these increases, the new small business size standards range between $5.5 million and $38.5 million.

Using the Gross Domestic Product price index to obtain the most comprehensive measure of inflation, the SBA determined that the amount of inflation that occurred between the first quarter of 2008 and the last quarter of 2013 was 8.73 percent.   The SBA then calculated the new size standards by multiplying the current size standards by 1.0873 and then rounding that total to the nearest $500,000.  After these adjustments,

This latest adjustment of the revenue-based size standards for inflation is separate from the comprehensive review of all size standards that the SBA is supposed to perform at least every five years.

The new size standards can be found at: http://www.regulations.gov/#!documentDetail;D=SBA-2014-0009-0001.  Busineeses have until August 11, 2014 to submit any comments on these rules which technically are “interim final rules” at this point.

Because these new size standards will apply to certificates of small business size status signed on or after July 14, 2014, small (and near-small) businesses should review the new size standards to determine whether they now qualify as a small business concern.   Businesses also should visit the System for Award Management (SAM) and verify that their profile and certifications are up to date based on the revised size standards.

See more details on the SBA’s website at: http://www.sba.gov/content/what%27s-new-with-size-standards.

Businessmen sentenced for bribery in connection with Camp Pendleton contracts

July 7, 2014 by

The presidents of two California contracting firms were sentenced on June 27, 2014 to prison terms after pleading guilty to bribing a federal employee to get construction and service contracts worth millions of dollars at Camp Pendleton.

Hugo Hernandez Alonso, 50, of Chula Vista was sentenced to a year in prison and fined almost $127,000. Bayani Yabut Abueg Jr., 51, of San Diego was sentenced to six months in prison and fined $366,140.

The two admitted to bribing Natividad Lara Cervantes, a civilian employee of the Department of Defense who was the supervisor for construction and service contracts in the inspection branch of the department. Cervantes pleaded guilty in January and is set to be sentenced in July.

The bribes stretch back from 2008 to 2011, with Cervantes receiving thousands of dollars in cash and remodeling work on his San Diego condominium, according to documents filed in San Diego federal court, where the cases were decided.

Keep reading this article at: http://www.latimes.com/local/lanow/la-me-ln-contractors-camp-pendleton-20140628-story.html

Read update on sentencing here: http://pennrecord.com/news/14111-former-pa-businessman-sentenced-for-role-in-136-million-conspiracy

What tests today’s contractors

July 3, 2014 by

With federal contract spending near its lowest levels in a decade, agencies are upping their solicitations and award-hungry companies are increasing their bid protests. Chief factors in the spending reductions are the drawdowns of the wars in Iraq and Afghanistan (the Pentagon being by far the largest contracting agency) and sequestration.

These and related trends are captured in the following five charts drawn from a new report on fiscal 2013 contracting released this month by the National Contract Management Association (NCMA) in partnership with Bloomberg Government.

See charts like the one below at: http://www.govexec.com/contracting/2014/06/what-tests-todays-contractors-5-charts-illustrating-acquisition-landscape/86815

Gov't Prime Contract Spending by FY 03-13

 

Federal government again falls short of its small business goals

July 1, 2014 by

The federal government is falling short of its goals for awarding contracts to small businesses in some industries where it spends the most money, according to the Small Business Administration.

The government has an overall goal of giving 23 percent of its contracting dollars to small businesses. It has routinely missed that goal in recent years.

An analysis of federal spending by the SBA’s Office of Advocacy shows small businesses got less than 12 percent of contracting dollars spent at manufacturers during the 2012 fiscal year. The government spent nearly $200 billion on manufacturing contracts, the most in a single industry.

One problem is not the number of contracts going to small businesses, but the amount of those contracts, the analysis says. And in industries like manufacturing, a high amount of contract dollars go to a small number of companies — for example, defense contractors like Lockheed Martin Corp. or Boeing Co. that each get billions of dollars annually.

One concern continually raised by lawmakers is that some large companies with federal contracts don’t live up to agreements to give subcontracts to small businesses.

Small businesses, meanwhile, got 22.5 percent of the $141 billion spent at companies providing professional, scientific and technical services. They received 21.3 percent of the $43 billion spent at companies providing administrative and support, waste management and restoration services.

Keep reading this article at: http://www.inc.com/associated-press/small-businesses-contracts-fall-short.html 

Defense acquisition rule requiring contractors to report counterfeit parts set to be included in the FAR

June 30, 2014 by

In May, the Department of Defense amended the Defense Federal Acquisition Regulation Supplement (DFARS) to require certain contractors to detect and report counterfeit electronic parts.  (See DFARS rule on “Detection and Avoidance of Counterfeit Electronic Parts” by clicking here.)

Now, the Federal Acquisition Regulation (FAR) Council has published a proposed rule to greatly expand counterfeit reporting obligations.  The newly proposed rule sets forth sweeping requirements for contractors and subcontractors to report nonconforming items.

Unlike the DFARS rule, which limits application to particular electronic parts and a certain category of contractors, the proposed FAR rule extends beyond electronic parts and specific contractors.  In fact, the proposed rule is designed to effect all contracts for acquisition of supplies or services that include supplies.

Under the proposed rule, contractors and subcontractors at all tiers must screen the Government-Industry Exchange Program (GIDEP) as part of their quality control processes.  Further, the proposed rule requires reporting in GIDEP of any “common” items purchased that are counterfeit, suspected to be counterfeit, or contain “major nonconformance” or “critical nonconformance.”   In addition, contractors must notify Contracting Officers, in writing, when they become aware that “any end item, component, subassembly, part or material contracted in supplies purchased by the government” is counterfeit or suspected to be counterfeit.

Written comments on the proposed rule are due by August 11, 2014.   Comments are to be submitted via the Federal eRulemaking portal by searching for ‘‘FAR Case 2013–002’’.    Select the link ‘‘Comment Now’’ that corresponds with ‘‘FAR Case 2013–002.’’ Follow the instructions provided at the ‘‘Comment Now’’ screen. Please include your name, company name (if any), and ‘‘FAR Case 2013-002’’ on your attached document.  Comments may be faxed to 202–501–4067 or mailed to: General Services Administration, Regulatory Secretariat (MVCB), ATTN: Hada Flowers, 1800 F Street NW., 2nd Floor, Washington, DC 20405.

SBA increases small business size standards for construction

June 27, 2014 by

The SBA has published an interim final rule which increase in size standards for nine major categories of construction.    SBA size standards define the maximum size a firm can be and still be considered a small business.   The new standards are shown in the table below.

While the increases in the size standards are not dramatic, they could make a difference for construction companies on the verge of graduating; those that have recently graduated; and those that want to submit offers as a small business.

The interim rule is effective July 14, 2014, and can be found at: http://www.gpo.gov/fdsys/pkg/FR-2014-06-12/pdf/2014-12868.pdf.

NAICS Code

NAICS U.S. Industry Title

Old Standard

New Standard

238210

Electrical Contractors and Other Wiring Installation Contractors

$14 million

$15 million

237130

Power and Communication Line and Related Structures Construction

$33.5 million

$36.5 million

236210

Industrial Building Construction

$33.5 million

$36.5 million

236220

Commercial and Institutional Building Construction

$33.5 million

$36.5 million

237110

Water and Sewer Line and Related Structures Construction

$33.5 million

$36.5 million

237120

Oil and Gas Pipeline and Related Structures Construction

$33.5 million

$36.5 million

237210

Land Subdivision

$25.5 million

$27.5 million

237310

Highway, Street, and Bridge Construction

$33.5 million

$36.5 million

237990

Other Heavy and Civil Engineering Construction

$33.5 million

$36.5 million

237990

Dredging and Surface Cleanup Activities

$25.5 million

$27.5 million

Subsector 238

Specialty Trade Contractors

$14 million

$15 million

The new size standards will govern what contractors can certify as small businesses when they bid on or submit a proposal for projects on or after July 14, 2014, or seek certification, after that date, through the SBA for the 8(a), HUBZone or woman-owned small business programs or seek verification through the Department of Veterans Affairs for the Veteran Owned or Service-Disabled Veteran Owned small business programs.

Contractors at or near the size standard should take this opportunity to conduct a review of their last three fiscal years’ tax returns to determine their average annual receipts. 

Big contracts for Defense, Commerce and State departments coming this summer

June 26, 2014 by

More than $13 billion in large and small-business contracts with the federal government is likely to come up for competition in the three-month period ending September.

These requirements are meant to improve efficiency and decrease the cost of services across and between federal agencies. Requirements range from health systems to professional services, all in IT. Several are recurring requirements, while one is a new competition.

Read about three notable contracts anticipated to be advertised for competition by the Defense, Commerce and State departments in the federal government’s fourth quarter here: http://www.washingtonpost.com/business/capitalbusiness/big-contracts-for-defense-commerce-and-state-departments-coming-this-summer/2014/06/13/4a2bc594-f014-11e3-9ebc-2ee6f81ed217_story.html

SDVOSBs take it on the chin: Federal Circuit denies Kingdomware appeal

June 25, 2014 by

In a crushing blow to SDVOSBs, the U.S. Court of Appeals for the Federal Circuit has denied the appeal of a lower court decision allowing the VA to procure goods and services using the Federal Supply Schedule without first considering whether SDVOSBs can satisfy the requirement.

Rejecting well-stated objections by a dissenting judge, a two-judge majority held that the purpose of the “Veterans First” rule is to ensure that the VA meets its SDVOSB goals, and that so long as the VA meets its SDVOS goals, it is free to procure services and supplies from the Federal Supply Schedule without first considering a SDVOSB procurement.

The Court’s decision in Kingdomware Technologies, Inc. vs. United States, No. 2013-5042 (2014) is the latest (and possibly last) in a long-running battle between SDVOSBs and the VA over the SDVOSB preferences adopted by Congress as part of the Veterans Benefits, Health Care and Information Technology Act of 2006. Because it has been awhile since the last decision in this battle, I have summarized the relevant history before diving into the particulars of the Federal Circuit’s decision.

Keep reading this article at: http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/sdvosbs-take-it-on-the-chin-federal-circuit-denies-kingdomware-appeal/

GSA seeks industry input for HR acquisition planning

June 24, 2014 by

The General Services Administration (GSA) is seeking industry comment to be taken into consideration as the agency puts together an acquisition plan for the procurement of a range of human resources (HR) services.

Listed below are questions that GSA would like industry to answer in order to capture best practices and lessons learned from previous contract vehicles and solicitations, merging industry standards and solutions with the Government’s Office of Personnel Management (OPM) to achieve best value in the fields of human resource training and development and human capital management services.

The information provided will be utilized for preliminary planning purposes by the Government to facilitate the decision-making process and will not be disclosed outside of Government. All data received that is marked or designated as corporate or proprietary information will be fully protected from release outside the Government. No reimbursement will be made for any costs associated with providing any information or any follow-up information requests. GSA’s call for industry comment does not constitute a Request for Proposal (RFP) or Request for Quote (RFQ) and is not to be construed as a commitment by the Government for any purpose other than market research.

Furthermore, the Government is not seeking proposals or quotes and will not accept unsolicited proposals or quotes at this time.

The Government anticipates making preliminary decisions on the acquisition strategy by mid-July; therefore, the Government is seeking industry feedback as soon as possible.

Responses can be sent to vog.asgnull@issfrh.

The Government is seeking the following information:

1. What suggestions does industry have to incorporate the OPM’s Human Capital Assessment and Accountability Framework (HCAAF) in the solicitation and resultant contracts?   The website for the framework is: http://www.opm.gov/policy-data-oversight/human-capital-management/#url=Framework

2. What suggestions does industry have in incorporating GSA’s Federal Strategic Sourcing Initiative (FSSI) in the solicitation and resultant contracts?  The website for FSSI is: https://strategicsourcing.gov/

3. Would industry prefer a Statement of Objectives (SOO) or a Statement of Work (SOW) be included in the solicitation and why?  Please provide a rationale for your preference?

4. Would industry prefer two separate contract vehicles—one for small businesses and another for large businesses—or combine both sizes into one contract vehicle?

5. The recently cancelled CHRS solicitation included ten (10) mandatory labor categories and an additional fifteen (15) labor categories industry could propose.  GSA’s Multiple Award Schedule (MAS) 738 X (Human Resources & Equal Employment Opportunity Services) does not have the same restrictions.  Would industry prefer the Government provide the labor categories and descriptions in the solicitation or allow industry to propose them?  Please provide a rationale for your preference?

6. What changes does industry recommend to the current TMA contract vehicle and recently cancelled CHRS solicitation?

7. How does industry want to be evaluated when the successor CHRS solicitation is released?  What factors and significant subfactors are relevant?  What suggestions does industry have so that the Government obtains best value?

8. The TMA contract vehicle has featured two key service areas (Customized Training and Learning Solutions & Customized Human Capital Solutions) for the past thirteen years.  Would industry recommend any reconfiguration of these key service areas?  Should they be combined into one key service area, remain the same or broken out into additional key service areas?  Please provide a rationale for your preference?

9. The prior CHRS solicitation included two key service areas: Customized Training and Learning Solutions & Customized Human Capital Solutions.  The government is contemplating including staff augmentation.  Should staff augmentation fall under the human capital key service area or stand alone?

10. What subject matter, topics and/or fields should be included in the scope of the successor TMA contract vehicle under the two key service areas: Customized Training and Learning Solutions & Customized Human Capital Solutions?

11. What subject matter(s), topic(s) and/or field(s) are not in the current TMA contract vehicle or were left out of the recently cancelled solicitation that should be included in the successor TMA contract vehicle?

12. For large businesses, how would you want the subcontracting plan evaluated?  What are realistic goals per socioeconomic status?

13. Please describe the federal government’s requirements in the training/human capital domain that you believe will either begin to or continue to need customized solutions from your industry.

14. DELETED

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18. DELETED

QUESTIONS ADDED ON JUNE 18th, 2014

19. If the Government utilizes the same evaluation methodology employed in the One Acquisition Solution for Integrated Services (OASIS) solicitation, what concerns, comments and/or feedback does industry have?  The OASIS solicitation can be found at https://www.fbo.gov/index?s=opportunity&mode=form&tab=core&id=9894b0308c….

20. If the Government determines to award an IDIQ and allow Time and Materials (T&M) orders to be issued against it, what would be the impact to both large and small businesses if the IDIQ required contractors to have an approved accounting system, purchasing system and estimating system?

QUESTION ADDED ON JUNE 20th, 2014

21. What suggestions and/or ideas does industry have to incorporate sustainable metrics into the acquisition? (This question replaces Questions 14-18)

See GSA’s blog posting on this topic at: https://interact.gsa.gov/discussion/seeking-industry-feedback

Mandatory GSA Schedule modification issued

June 23, 2014 by

GSA has announced GSA Schedule Mass Modification number A382 relating to Manufacturer Part Numbers on Federal Supply Schedule (FSS) Price Lists.  This Mass Modification is mandatory for both product and service providers.

On June 17, 2014, GSA began sending out the Mass Mod for Manufacturer Part Number to all applicable contractors.  The purpose of this modification is to reinforce the requirements of clause I-FSS-600 Contract Price Lists (Oct 2013) and clause 552.238-71, Submission and Distribution of Authorized FSS Schedule Price Lists.

Per these clauses, the contractor’s price list must be complete and include all services, prices, and terms and conditions that were accepted by the Government at award and the complete price list must be uploaded to GSA Advantage!™ including the Manufacturer Part Number.

In this modification GSA is explicitly stating and reinforcing that all Government-accepted products, fixed-price services and/or ancillary products that have been awarded must be included in the price list, and that the product descriptive data must include the Manufacturer Part Number.  The complete price list must be uploaded to GSA Advantage!™ per clause 552.238-71, Submission and Distribution of Authorized FSS Schedule Price Lists.

The Government is now treating the Manufacturer Part Number as a critical part of the descriptive product data included in the price list.

A Manufacturer Part Number is considered to be a unique number or code created by the manufacturer of a specific product, and assigned as a means of standardized  product identification. Vendors are cautioned not to alter the Manufacturer Part Numbers.  There should be  no additions, deletions, or other discrepancies between the  Manufacturer Part Number as submitted to the vendor by the manufacturer, and as presented by the contract holder to GSA.  For example, vendors should not add their own prefixes or suffixes to any Manufacturer Part Number.

GSA Schedule contractors are to submit all responses, including all product data, within 90 days of the date of issue of the contract modification received from GSA. Failure to comply with the terms of the modification may result in contract cancellation.

Upon receipt of the contract mod, contractors should go to https://vsc.gsa.gov and accept the modification.  Contractors then must access SIP or EDI and upload all products, fixed price services, and ancillary products with all required descriptive data including Manufacturer Part Numbers.

GSA’s Answers to Frequently-Asked Questions:

1: Is this mass modification mandatory?

A: Yes.  This mod is mandatory to ensure GSA is capturing all the  Manufacturer Part Numbers and all other descriptive data for all Products award on the GSA MAS contract, including Ancillary Products  fixed-price services (i.e., training course).

2: I have a service-only contract, and have no fixed-price services or ancillary products. How do I respond?

A: Although the reinforcement is not applicable to your contract, select “Yes” to acknowledge the requirement on the Vendor Support Center website.

 3: Do I need to submit all my products?

A: Yes.  Any product, ancillary product, or fixed-price service that  you have listed on your MAS contract should be submitted, along with its corresponding product data.

 4: Does this rule apply to previous submissions?

A: Yes.  Industry partners should take this opportunity to revisit previous submissions and correct or refine any missing or altered manufacturer part numbers.

 5: What should I do if I do not have (or can not obtain) the Manufacturers Part Number?

A: Industry partners should make a best effort to obtain accurate product information.

 6: Why is GSA asking for Manufacturer Part Numbers?

A: GSA is focusing on bolstering data driven offerings in order to improve the acquisition experience for customers, acquisition officials, and industry partners alike.  Expanded data repositories pave the way for streamlined, value-added functionality that will minimize effort while maximizing returns.