Congress could turn heat up on small-biz goals
January 27, 2012 by cs
Under a new bill, a department that misses a set goal to contract with small businesses could lose 10 percent of its budget as a penalty.
Rep. Bill Owens (D-N.Y.) introduced the Small Business Growth and Federal Accountability Act (H.R. 3779) Jan. 18, saying the government’s annual 23-percent small-business contracting goal is regularly ignored by agencies.
He said his bill would “ensure that Washington lives up to its promise to foster an environment of success for small businesses.”
Owens, a member of the Small Business Committee, said federal agencies typically fail to meet their small-business contracting goals and they currently face no penalties for the shortfalls.
Under his bill, if an agency misses the set small-business contracting goal, their budget would decrease by 10 percent in the following fiscal year, with that percentage of funds going to pay down national debt.
“It is critical that federal agencies be held accountable,” Owens said.
The bill also would offer agencies more authority to give “preference” to small companies when awarding contracts. The term “preference” is not defined in the bill.
The bill has been sent to the Small Business Committee for consideration.
It is true that the government struggles to meet its annual 23-percent contracting goal. In the most recent scorecard from the Small Business Administration, the government reached 22.7 percent in fiscal 2010.
That year, agencies awarded a total of nearly $100 billion in contracts to small businesses. However, it was an increase in prime contract dollars going to small businesses for the second year following four years of decline.
SBA gave the government a B on the scorecard for its efforts in contracting with specific types of small businesses, such as those owned by a service-disabled veteran or located in an economically depressed area.
Owens’ bill could have several repercussions though.
In a post on the Government Contracts Legal Forum blog, Tiffany Wynn, an associate at the Crowell and Moring law firm, said agencies may decide to reduce their contracting goals to avoid the 10-percent penalty.
As a result of the bill, officials would have to weigh the penalties for missing the small-business goal against awarding a contract to a large company if the agency could save money.
Wynn also questioned whether this legislation would lead to penalties on companies that don’t meet their own annual small business subcontracting goals.
About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Federal Computer Week. This article appeared Jan. 25, 2012 at http://washingtontechnology.com/articles/2012/01/25/small-business-goal-reduced-budget-penalty.aspx?s=wtdaily_260112.
SBA’s elevation to Cabinet-level is a symbolic move, experts say
January 20, 2012 by cs
President Obama’s announcement Friday that he was “elevating the Small
Business Administration to a Cabinet-level agency” was a largely symbolic
gesture, government scholars say.
“The president has the ability to designate his Cabinet and the SBA will be
now part of his Cabinet,” Federal Chief Performance Officer Jeffrey Zients
reiterated during the White House press briefing, after Obama’s remarks.
There is a distinction to be made, however, between the president inviting
the head of an agency to his Cabinet, as Obama will do with SBA Administrator
Karen Mills, and elevating the entire agency to “Cabinet-level status,”
according to Paul Light, Paulette Goddard Professor of Public Service at New
York University.
Light described Cabinet-level status as “a formal designation that only
Congress can make by giving the individual and the agency a particular level in
the executive pay structure.” He explained that Mills’ future attendance at
Cabinet meetings is purely symbolic and will in no way affect her pay grade
unless Congress passes additional legislation.
“He’s basically saying, ‘I’m going to call this person a BFF . . . and I’m
going to invite this person to our clubhouse for our quarterly Cabinet
meetings,’ ” Light said, comparing the process to the ceremonial act of
knighthood.
Don Kettl, dean of the University of Maryland School of Public Policy, also
sees the act as mostly symbolic.
“Whether an agency is Cabinet rank or not, in terms of getting the job done,
doesn’t really matter a whole lot,” Kettl said. “It has much more to do with
political symbolism.”
SBA has been on and off the presidential guest list for nearly two decades.
President Clinton first extended an invitation to the agency head to join his
Cabinet in 1994, when, according to Light, he also misused the legislative term
“elevate.” President Bush rescinded the Cabinet invitation after he took
office.
In 1988, Congress elevated the Veteran Affairs Department to Cabinet-level
status. At the time, President George H.W. Bush remarked, “There is only one
place for the veterans of America: in the Cabinet room, at the table with the
president of the United States of America.”
VA’s promotion may have been a mixed blessing: “They got the name change,
they got the accoutrements of Cabinet status, the limousine,” Light said. But
the department couldn’t get additional employees or funding for new signs,
thanks to provisions in the elevation legislation that prohibited such
expenditures.
Light said in the grand scheme of things, federal agencies are “probably
better off” not receiving Cabinet-level status. “That table’s not very important
anymore — we don’t have Cabinet government as presidents once imagined,” he
said.
SBA’s seat at the table is likely temporary. The president’s full
reorganization plan, which must be approved by Congress, would roll SBA and five
other trade-related entities into one, still-unnamed agency.
– by Andrew Lapin – Government Executive – January 13, 2012 at http://www.govexec.com/story_page.cfm?articleid=49775&dcn=e_gvet
SBA, to be elevated to Cabinet level, is among agencies Obama wants consolidated
January 13, 2012 by cs
On Friday, Jan 13, 2012, President Obama announced he will ask Congress for the power to merge six federal trade and commerce agencies, the Wall Street Journal reported.
The WSJ report said Obama will ask Congress for “reorganizational” power. The last president to have this power was Ronald Reagan.
The new power would allow the president to propose mergers in order to save money and make the government work more efficiently, according to the report.
The plan would allow Obama to propose mergers that would be “guaranteed an up-or-down vote from Congress within 90 days,” the report said.
The six agencies Obama wants to consolidate include the Commerce Department‘s core business and trade functions, the Small Business Administration, the Office of the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation and the Trade and Development Agency.
The report cited a White House official who said the merger would save taxpayers around $3 billion over the next decade by eliminating duplicate overhead costs.
In addition, between 1,000 and 2,000 jobs would be eliminated through attrition, according to the WSJ.
Surviving and thriving as a small government contractor
December 27, 2011 by cs
During a recent Fairfax County (Virginia) Chamber of Commerce event small, woman-owned and veteran-owned businesses converged to learn about the federal government contracting outlook for 2012 and hear from those who have been in small business shoes.
Freedom Bank’s Vice President and Relationship Manager of Government Contracting Lending, Michael Marsden, led a panel discussion that included an analyst from Bloomberg Government; Phil Panzarella, the president and CEO of CPS Professionals Services, a veteran-owned contractor; and Dawn Halfaker, the CEO of Halfaker & Associates, a woman-owned, 8a, service-disabled veteran-owned contractor.
The panelists’ companies represent a wide array of socioeconomic statuses that act as differentiators and could allow them to fulfill the specific teaming needs of other contactors. However, both Panzarella and Halfaker stated that leading with socioeconomic statuses is not a key to surviving or thriving as a government contractor.
So if your company’s unique qualities won’t make you stand out, what is the best way to get started and win your first government contract?
Relationships and Networking
Data from Paul Murphy, Bloomberg Government Senior Data Analyst, and advice from Panzarella and Halfaker had a common theme: would-be
contractors should network and create valuable relationships.
Murphy’s data showed that while some socioeconomic goals have not been met by certain agencies, they have been increasing. By focusing on the agencies that are striving to meet their small business contract goals and creating relationships with contacts within them, a company will be making a better investment of its time than trying to focus on every agency at once.
The Departments of Veteran Affairs, Homeland Security, Energy and General Services Administration are among the agencies increasing their spending with small businesses. However, not all agencies are making these increases. The Small Business Administration is one such agency: Murphy stated that the SBA will be making cuts, which means less monitoring and enforcement of rules.
Furthermore, heavy cuts will affect the SBA business development centers. This will affect relationships in a couple of ways: Small businesses will have to rely more on each other, and valuable relationships may be better invested in other potential teaming and subcontracting partners.
“We had a lot of success partnering with other large companies. It is easier to connect with their points of contacts compared to agency contacts. Leverage
those relationships. You need to focus on agencies, but limit it,” said Halfaker.
She went on to say that at times, it can be difficult to identify the right point of contact in both agencies and large companies. Relationships with existing connections can help point you in the right direction.
When it comes to partnering and opening a line of communication to other contractors, there must be a give/take relationship, and you must work at it. Unless you continue to communicate with agencies and partners, your relationship could become strained. “Out of sight, and out of mind,” said Panzarella.
Panzarella also stated that prior to building a partnership, CPS Professionals Services requires that small businesses already have a scope and plan in place.
Planning and Preparing for Growth
Though Halfaker & Associates and CPS Professionals Services may have started in the proverbial basement and were initially funded by equity loans, they knew that as they began to win more contracts, growth and complications would be inevitable. Contractors must plan not only how to grow by adding new
employees and infrastructure, but what to do in case of delays in federal payments. Panzarella and Halfaker suggested that spending time wisely (not wasting it on events that won’t result in new connections or beneficial information) and creating a focused plan led to their companies’ growth.
“Hard work. We put in a lot of hours because I believe in where we are going as an organization. We don’t have to go in and win multi-million-dollar awards, we can take the million-dollar contracts,” said Panzarella. His company remained very focused on what it wanted, picked a few agencies, and pursued them.
Tips from Dawn Halfaker
- Know what drives revenue – Focus on the events that will provided the best return.
- Leverage social media – Appear as big as you can. Brand yourself internally and externally more effectively.
- Know your next hire – Make sure you can afford and pay for the new employee.
Related Link
Five Keys to Small Business Government Contracting in 2012
About the Author: Elliot Volkman holds a Masters in digital communications and is the Community Manager of GovWin from Deltek. Published Dec. 19, 2011 at http://govwin.com/elliotsv_blog/surviving-and-thriving-as-small/340486.
OFPP, SBA team up on procurement data
November 22, 2011 by cs
Agencies may soon have a smoother and faster process to deal with small-business contracting data. The Office of Federal Procurement Policy and the Small Business Administration said Nov. 14 in a memo that they are aligning operations.
Each year, SBA sends individual reports to agencies on anomalies related to small-business contracting awards. The reports help officials answer questions about data before SBA releases its small-business contracting scorecards. Then agencies turn in reports to OFPP and the General Services Administration, certifying that their procurement data is accurate and complete.
This fiscal year, OFPP and SBA will begin integrating the two processes. Officials said integrating the small-business data quality reviews will reduce the acquisition workforce’s work and improve acquisition planning. They also said the new alignment will improve accuracy of the data.
For the fiscal 2011 data reviews, SBA will provide agencies with anomaly reports. These reports will be focused on high-risk areas though.
OFPP and SBA want something in return for their changes.
“We ask that you increase the attention given to small-business data quality as part of your ongoing data validation efforts,” they wrote in the memo.
Officials expect agencies to incorporate a stronger focus on small-business data.
To help with that, GSA is developing standard anomaly reports available in the Federal Procurement Data System. These reports use the protocols currently available to agencies. They will be easier to use with a standard form.
About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Federal Computer Week. This article appeared Nov. 18, 2011 at http://fcw.com/articles/2011/11/18/ofpp-sba-small-business-procurement-data.aspx.
Small-biz set-asides may harm firms, expert says
November 15, 2011 by cs
There may already be too many set-aside categories for small businesses, according to at least one expert. The sheer number of categories, and the targets set for agencies to award certain numbers of contracts to each, has the unintended consequence of squeezing some small businesses out of the game, he said.
The plethora of small business programs “has disenfranchised many of those who are not eligible to the extent that they no longer back the very programs they once were glad to support,” Scott Bellows, a program manager at the South Carolina Procurement Technical Assistance Center in Columbia, S.C., said Nov. 7.
And yet, the government is now considering creating yet another category, for businesses that employ military veterans.
During a hearing, Bellows told the House Small Business Committee’s Contracting and Workforce Subcommittee that the small-business programs, such as those helping companies owned by service-disabled veteran and women, and the 8(a) companies, don’t do as much as most people think to help small businesses at large.
Many of the same contractors tend to get the work over and over. That makes it hard for other small companies to break into the market, he said.
To break in, business owners “soon realize that it’s a long, uphill battle,” he said.
Bellows said the government, along with the Small Business Administration’s annual small business score card, should take a different look at the awarded set-aside contracts.
“If one asks how many ‘unique’ vendor contracts were awarded during a certain period of time, you might just come away with a different impression of how these programs are promoting small business development and helping to revitalize our economy,” he said.
The score card gave the government overall a B in awarding contracts to small businesses in fiscal 2010. The government has a goal to award 23 percent of contracts to small companies. In 2010, it reached 22.7 percent. It missed many of its goals for the specific categories of small businesses.
President Barack Obama’s Interagency Task Force on Veterans Small Business Development has recommended the government should consider giving companies with at least 35 percent of its employees as veterans a special status in federal contracting. They likened the new category to the Historically Underutilized Business Zone small business program. For HUBZone status, 35 percent of a small firm’s employees must live in an economically depressed zone.
The task force said the new small-business category would not take too much regulatory efforts. The task force wants the Veterans Affairs and Defense departments, as well as SBA and the Office of Management and Budget, to further explore the idea.
The task force is interested in the hiring aspect of creating the new category.
About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement at Federal Computer Week. Published Nov. 9, 2011 at http://fcw.com/articles/2011/11/09/set-aside-small-business-programs-other-small-business-effects.aspx.
Do Alaska Native Corporations deserve their special contracting status?
November 14, 2011 by cs
For many people, the government’s set-aside program for Alaska Native Corporations is a blemish on the federal acquisition system. Even people who otherwise support the idea of setting aside contracts for economically disadvantaged groups take a dim view of the program, which allows agencies to award contracts of any size to ANC firms without competition.
Ever since the death of its champion, Alaska Sen. Ted Stevens, opponents have called for the program to end. Here is an overview of the arguments for and against keeping it.
The case for the ANC program:
* It’s a time-saver. Agencies can award sole-source contracts of any size to ANCs at any time. Therefore, the ANC program lets contracting officers move quickly when they’re pressured for time or caught in emergency situations, such as preparing for a hurricane.
The contracting officer doesn’t have to spend time justifying a sole-source award when using an ANC, said Larry Allen, president of Allen Federal Business Partners.
Officials also save time by avoiding the bid protests that are always a risk during full-and-open competitions.
* It stimulates the economy. The program benefits Alaska natives in economically depressed areas in the state and other parts of the country.
A 2009 survey of 11 ANCs by the Native American Contractors Association (NACA) showed that the companies provided more than $530 million in various types of benefits to more than 67,000 shareholders from 2000 to 2008. More than $341 million of that money was in cash dividends.
Alaska natives are given the opportunity to go to college, for instance, with their shares in the ANCs, said Jennine Elias, director of external affairs at NACA.
The program also provides funding for housing and government services, such as law enforcement.
* It’s a promise-keeper. ANCs were created to settle land claims with Alaska natives and foster economic development, and the companies have been allowed to participate in the government’s 8(a) minority-owned small-business program since 1986. Therefore, the ANC program fulfills a promise to the native community, Elias said.
The case against the ANC program:
* It short-circuits the procurement process. Although sole-source provisions can help in emergencies, the process can tempt an official to award a contract when it would be better to hold a competition for the work, Allen said.
There’s no doubt that contracting officers are overworked, and the ANC program can help ease their workload. But, he cautioned, “a program with good intentions can get out of control.”
* It undermines efforts to level the playing field. There was a big push for parity in government several years ago. Companies in Historically Underutilized Business Zones used to have first crack at set-aside contracts, but Congress put all small businesses on an equal footing last year.
“The theme is parity among other guys,” said Rob Burton, former deputy administrator at the Office of Federal Procurement Policy and now a partner at Venable law firm. But because ANCs don’t have to follow the same rules as other small businesses, they have “an incredible deal.”
Other small-business owners and Federal Computer Week readers have voiced their frustrations.
“The ANC advantage is unfair to real 8(a) companies and should be disbanded,” commented one reader from Virginia.
* Its benefits to the native community are questionable. The benefits ANC shareholders receive have come under scrutiny over the years. Sen. Claire McCaskill (D-Mo.), chairwoman of the Homeland Security and Governmental Affairs Committee’s Contracting Oversight Subcommittee, has found some problems with the program.
In 2009, her subcommittee’s analysis revealed that only about $615 a year in money, scholarships and other benefits go to each member of the Alaska native community. The report also says the ANCs employ a relatively small percentage of shareholders and often send work to outside subcontractors. McCaskill has proposed changes to match other small-business rules.
However, Elias said ANCs are already required to report on what they’re doing in their community in the interests of transparency.
And Allen said it’s a good program that would benefit from oversight by every agency, not just the Small Business Administration.
About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Washington Technology. Published Nov. 8, 2011 at http://washingtontechnology.com/articles/2011/11/07/home-page-acquisition-pros-cons-anc.aspx?s=wtdaily_091111.
Is small business ready for DHS’ $3B FirstSource II?
November 4, 2011 by cs
Homeland Security Department officials unveiled the details of their new seven-year, $3 billion FirstSource II contract.
The FirstSource II draft Request for Proposals was released Oct. 31. The final RFP is expected no later than December 31, officials said.
FirstSource I, a $2 billion contract launched in 2007, is expiring and its replacement will concentrate on commodity purchasing through value-added resellers, William Thoreen, director of the Acquisition Division in the Office of Procurement Operations, told 600 small business owners Tuesday at the Ronald Reagan Building.
“We really believe FirstSource II is going to become a very important piece of our portfolio both for IT and strategic sourcing,” he said.
Under FirstSource I, DHS has bought commodities through value-added resellers, including the purchase of computers, desktops, laptops, network cards, routers through small businesses, Thoreen said.
“The scope of the commodities we buy under it is very broad because we need a lot of different IT commodities,” Thoreen said, and added that FirstSource II will also include VAR purchases of new IT commodities.
“We have learned an incredible amount from that [initial] award and we are going to incorporate a lot of changes in FirstSource II that makes sense for us and we hope makes sense for you,” he said.
For one, “FirstSource II targets specific [small-business] categories that will help our program managers meet their individual goals,” Thoreen said.
FirstSource II “is going to be different. It will provide opportunities for small businesses to partner up for us. The most important thing is that it succeeds in fulfilling our mission needs. We’re not just contracting for contracting sake; there are mission needs and they need to be primary,” Thoreen said.
DHS CIO Richard Spires summed up the dilemma of most of his peers in government. “I’ve got more things coming at me than ever, more demands,” he said. “And I’m going to have less dollars – a pretty classic problem, right? – we’re feeling the squeeze right now.”
Spires said the new contract would address four DHS priorities: infrastructure rationalization, overall IT improvement, elimination of duplication and balancing the CIO workforce, which has grown to 260 employees during the past few years, to meet the new realities.
“We’ve got to make significant changes, particularly in our infrastructure and the commodity IT arena to be able to offer at least the same level of service – and I would hope more service – to my customer base,” he said.
“Data center consolidation, really looking hard and driving true cloud-based services both in the private cloud, out of our own enterprise data centers, as well as in the public services are certainly a couple of things that we’re doing that are very visible,” Spires said.
Spires added that he wants to leverage DHS’ great buying power as exemplified by FirstSource II “to bring components together in ways that we never have before across a lot of functions within DHS.”
As a result of discussions with the Small Business Administration and others, “we’re going to be able to use all five of the small business categories in which we have set-aside authority,” said Kevin Boshears, director of the DHS Office of Small and Disadvantaged Business Utilization.
“To our knowledge, this is the first time this has been done in the federal contracting arena,” he added.
As a result, FirstSource II will have clear set-aside awards to 8(a), HUBzone, Service Disabled Veteran-Owned, Economically Disadvantaged Woman-Owned, and general small business.
But Boshears urged all small businesses “to be aware of the individual aspects of these [five] programs. There are common themes that run through all five of them, but there are individual details that may be germane to [only] one of the individual five categories.”
“So be certain that you are comfortable with the rules and all that has been asked of you to participate in any of the five categories,” he added.
Addressing the issue of teaming, Boshears said although teaming has always been a successful part of DHS contracts and because First Source II is all for small business, “we want each participant to be absolutely clear about which firm is serving as the prime contractor in both the pre-award phase and the post-award phase.”
He said that’s important for proposal preparation, for meeting all the requirements of the small business program and for transparency.
To answer “the question I get the very most – how many awards are you going to make?’ Boshears said the proper answer is “competition determines the final number.”
But a scan of previous DHS-wide multiple award contracts, including Eagle I, have averaged 27 to 28 small business prime contracts, he added.
“That doesn’t give you the absolute final number,” he said, “but it does give you kind of an idea of what we’ve done on previous projects.”
About the Author: David Hubler is senior editor of Washington Technology. Published Nov. 3, 2011 at http://washingtontechnology.com/articles/2011/11/03/dhs-firstsource-ii.aspx.
Procurement chief defends Obama’s commitment to small business
October 27, 2011 by cs
A proposed rule to curb agencies’ little used capacity to offer higher payments to needier contractors “will have no impact on the government’s ability or commitment to drive contracting opportunities for small disadvantaged businesses,” Dan Gordon, administrator of the White House Office of Federal Procurement Policy, said Friday.
In a blog post for the Office of Management and Budget, Gordon sought to reassure some in the minority business community that a proposed regulation issued in September by the Small Business Administration is a routine “housekeeping” tool designed to catch the law up with a 2008 court ruling that declared such price premiums unconstitutional.
“The proposed rule in no way changes the fundamental policies, practices or programs that agencies have been using in recent years to achieve strong SDB
participation in the federal marketplace, including the goal of awarding 5 percent of federal procurement dollars to SDBs,” Gordon wrote.
The affected agencies — the Defense Department, NASA and the U.S. Coast Guard — have not used price premiums to attract disadvantaged small contractors in years, Gordon noted. But the administration has “been working with the Minority Business Development Agency to strengthen the bond between contracting, small business and program offices at every agency,” Gordon wrote. “Since the beginning of [fiscal] 2009, agencies have awarded more than $85 billion in contracts to SDBs, exceeding the goal of awarding at least 5 percent of contract dollars to SDBs.” In fiscal 2010, he added, contract awards to small disadvantaged businesses accounted for 7.95 percent of all eligible contract dollars, “well above the goal.”
Gordon’s clarification came as the Obama administration readied a new set of executive actions designed to spur job creation in large and small businesses
while Congress debates the president’s larger proposed jobs package.
The perception among some that ending premium payments to disadvantaged businesses was a pullback in the administration’s commitment was rejected by Molly Brogan, vice president of public affairs for the National Small Business Association. “At the end of the day, small businesses just want a level playing field,” she told Government Executive. “Ensuring that small businesses — including SDB businesses — have a fair opportunity to compete for federal
dollars ought to be the No. 1 goal. We don’t believe this new rule will change [that] in any way.”
Raul Espinosa, founder of a Jacksonville, Fla. – based university nonprofit called the Fairness in Procurement Alliance, which has been pressing for stronger rules on accelerating payments to small disadvantaged businesses, said he was grateful for the administration’s overall effort, but worries it might be “lip service.” Changes “will mean nothing unless they’re codified into the federal acquisition regulation and referred to in actual contracts,” he
said.
– by Charles S. Clark – Government Executive – October 24, 2011 – http://www.govexec.com/story_page.cfm?articleid=49130&dcn=e_tma
SBA offers live web chat Oct. 27th on WOSB program
October 25, 2011 by cs
Are you a woman business owner seeking federal contracts?
The U.S. Small Business Administration’s October web chat will focus on the Women-Owned Small Business (WOSB) federal contract program aimed at bringing more WOSBs into the federal contracting arena. Federal contracts can provide women entrepreneurs with the oxygen they need to take their businesses to the next level. Celebrate Women’s Small Business Month, and visit http://go.usa.gov/4BV to get updated information about the women’s contract program.
Meanwhile, Michele Chang, senior advisor in the Office of Government Contracting and Business Development at the SBA, will host the October web chat on “SBA’s Federal Contract Program for Women – Part 2.”
This event will take place from 1 to 2 p.m. EST on Thursday, Oct. 27, 2011.
SBA’s web chat series provides small business owners with an opportunity to discuss relevant business issues online with experts, industry leaders and successful entrepreneurs. Chat participants have direct, real-time access to the web chats via questions they submit online in advance, and during the live session. Participants will gain valuable information on how to participate in the program to gain increased access to government contracting opportunities.
Participants can join the live web chat, and also post questions before the October 27th chat, by going online to www.sba.gov, and clicking on the web chat event under What’s New.
To review archives of past web chats, visit online at http://www.sba.gov/content/monthly-web-chat.