Family ties plus business ties may equal affiliation

July 14, 2014 by

The SBA affiliation rules are not always intuitive, and perhaps no SBA affiliation rule is as little understood as the so-called “identity of interest” rule under 13 C.F.R. 121.103(f).

Identity of interest affiliation can arise in several ways, including when close family members also have business ties.  As demonstrated in a recent SBA Office of Hearings and Appeals decision, a close family relationship between two business owners, plus significant business ties, may cause affiliation between the businesses.

SBA OHA’s decision in Size Appeal of Knight Networking & Web Design, Inc., SBA No. SIZ-5561 (2014) involved a Navy procurement for ship and shore satellite communications support services.  The solicitation was issued as a small business set-aside under NAICS code 541330.

After evaluating competitive proposals, the Navy announced that Knight Networking & Web Design, Inc. was one of several awardees.  An unsuccessful competitor subsequently filed a size protest, claiming that Knight was affiliated with various other entities.

Keep reading this article at: http://smallgovcon.com/sbaohadecisions/sba-affiliation-rules-family-ties-plus-business-ties-may-equal-affiliation/

Small biz size status ordinarily is based on underlying GSA Schedule contract

July 8, 2014 by

When a small business submits an offer for a Blanket Purchase Agreement issued against a GSA Schedule contract, the offeror does not automatically recertify its size.  Rather, a new regulation effective December 31, 2013 provides that an offeror’s size status for a BPA issued against a GSA Schedule ordinarily is determined by looking to the offeror’s self-certification for the underlying GSA Schedule contract.

In a recent size appeal decision, the SBA Office of Hearings and Appeals relied, in part, on the new regulation to find that an offeror had not recertified its small business status by submitting a quotation for a BPA to be issued against the offeror’s GSA Schedule contract.

SBA OHA’s decision in Size Appeal of Total Systems Technologies Corp., SBA No. SIZ-5562 (2014) involved a Homeland Security RFQ for business management support at the Coast Guard’s C4IT Service Center.  The Coast Guard issued the RFQ under the MOBIS Schedule 874, and stated that the RFQ would result in the award of a single BPA.  The RFQ was set aside for HUBZone firms.

Keep reading this article at: http://smallgovcon.com/sbaohadecisions/gsa-schedule-bpa-awards-size-status-ordinarily-is-based-on-underlying-gsa-schedule-contract/

 

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.

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 

SBA conducting step-by-step 8(a) certification workshop on July 17

June 30, 2014 by

The Atlanta District Office of the Small Business Administration (SBA) is conducting a workshop on July 17, 2014 in Atlanta to assist small businesses understand how to become 8(a) certified.

The SBA’s 8(a) Business Development program is a part of the federal government’s effort to promote equal business access for socially and economically disadvantaged individuals including Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, subcontinent Asian Americans, and in in some cases women business owners. Companies with an 8(a) Certification can benefit from the wide-range of services offered including government contracting opportunities, access to capital, management and technical assistance, and much more.

The workshop will be held at the U.S. Small Business Administration, 233 Peachtree Street, Suite 1900, Peachtree Center – Harris Tower, Atlanta, GA, 30303.

The workshop will be held from 10:00 am until 1:00 pm.

You must pre-register in order to attend.   Register here: http://events.sba.gov/EventManagement/EventRegistration.aspx?id=02602672-c156-e311-9914-02bfa56e2a24

 

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. 

Course is essential to understanding small business contracting rules

June 18, 2014 by

The Contracting Education Academy at Georgia Tech is repeating its three-day course that delves into the intricacies of the federal government’s Small Business Programs.  The course focuses on the government agencies’ efforts to improve small business participation in both prime contracting and subcontracting.

Because of its relevance and popularity, the course is now scheduled to be held:

  • July 8 – 10, 2014
  • October 7 – 9, 2014

These classes will be held in the world-class Global Learning Center on Georgia Tech’s campus in midtown Atlanta.  Registration details may be found by clicking here.

Academy identifier - gold & black w-white bkgrndKnown as “CON 260B – Small Business Programs,” the course is a Defense Acquisition University (DAU) level 2 contracting course that goes a long way to ensure that those in the acquisition field are more aware of and responsive to small business concerns.  Historically, this class was designed for small business specialists, however The Academy has fashioned this class so that it is applicable to all interested parties – senior executives, managers, contracting officers and contracting staff, small business specialists from all agencies, small business advocates, as well as large and small business concerns.

A review of DAU’s prerequisite course, CON 260A, is included in the Contracting Academy’s course.

Small business participation in federal contracting is a high-profile issue.  For example, a recent Dept. of Defense (DoD) memo (seen here) reiterates how essential small businesses are to our nation’s economic recovery because they produce more jobs, represent a major source of innovative solutions to warfighter needs that help maintain our status as the world’s finest military, and contribute more to gross domestic output.  The Contracting Academy is committed to supporting DoD and other agency directives aimed at achieving higher levels of small business participation in federal contracting.

Uncle Sam's DollarsAll leaders who manage budgets and allocate funds for contracts and contracting officers are collectively responsible for achieving the government’s 23 percent small business goal.  To ensure that this collective responsibility is met, many federal agencies’ senior executives are evaluated and held accountable for small business participation in contracting.  A mandatory performance requirement for supporting this goal includes language that “establishes a command or program climate that is responsive to small business concerns.”

The Academy’s CON 260B is very relevant to the training needs of everyone involved in the process of seeing to it that small businesses participate in government contracting and subcontracting opportunities.  This includes, of course, small businesses themselves — as well as large businesses who are required to establish small business subcontract participation plans.

The Academy offers CON 260B, a 3-day course, as an open enrollment course which virtually ensures seating for all registrants.  Register here for the next CON 260B – Small Business Programs class at Georgia Tech in Atlanta.

2.1 CEUs are granted to those successfully completing this course.

Newly organized concern affiliation: “Key Employee” must influence entire company

June 16, 2014 by

Newly organized concern affiliation under the SBA’s affiliation rules did not exist when the alleged former key employee of the affiliate did not exercise influence over the entire company.

In a recent decision, the SBA Office of Hearings and Appeals held that no matter the size of the alleged affiliate, a former “key employee” must have had the ability to influence the entire company in order for the newly organized concern affiliation rule to apply.

SBA OHA’s decision in Size Appeal of Metis Technology Solutions, Inc., SBA No. SIZ-5538 (2014) involved a size determination conducted in connection with Metis Technology Solutions’ application for admission to the 8(a) program.  The SBA Area Office initially found Metis to be affiliated with two large businesses.

Metis subsequently applied for recertification as a small business.  The SBA Area Office found that Metis was no longer affiliated with one of the large businesses.  However, the SBA Area Office found that Metis was still affiliated with the second large business, Booz Allen Hamilton, Inc., under the newly organized concern affiliation rule.

Keep reading this article at: http://smallgovcon.com/sbaohadecisions/newly-organized-concern-affiliation-key-employee-must-influence-entire-company/

GAO rejects protest of GSA’s massive office supply contract

June 13, 2014 by

The Government Accountability Office (GAO)  denied the protests of the GSA’s Office Supplies 3 (OS3) strategic sourcing contract, leaving the protesters dismayed and in shock.

In issuing their decision Monday, GAO’s lawyers found the General Services Administration (GSA) did indeed meet the requirements under the Small Business Jobs Act to evaluate the economic impact of OS3 on small businesses.

GAO’s decision comes despite the fact that the Small Business Administration in April ruled that GSA’s analysis was faulty. SBA found GSA’s analysis didn’t fully consider the negative impact OS3 could have on small firms.

But GAO stated the Small Business Jobs Act doesn’t require agencies to develop a “more detailed” or “quantified cost-benefit analysis” and therefore GSA’s determination met the letter of the law.

“GSA conducted market research and considered alternatives to the procurement approach set forth in the solicitation,” GAO’s Susan Poling, GAO’s general counsel, said in the opinion. “Further, the agency prepared a consolidation analysis which recognized that there was a potential for a reduction in sales for small business contractors who did not receive awards under the OS3 solicitation. The agency concluded, however, that the benefits to be gained through OS3 outweigh the potential negative impact to small business concerns. We find that GSA’s analysis addressed the relevant requirements of the SB Jobs Act, and therefore find no basis to sustain the protest.”

GAO addressed SBA’s ruling in the protest decision. Lawyers say SBA’s procurement center representative’s disagreement with GSA’s analysis wasn’t a basis for GAO to conclude the evaluation was unreasonable.

Keep reading this article at: http://www.federalnewsradio.com/index.php?nid=851&sid=3638981

4 sectors where most federal procurement is happening, and why that’s bad for small businesses

June 10, 2014 by

The vast majority of federal procurement is happening in four sectors — only one of which meets its goals for divvying contract dollars to small businesses.

According to a report from the Office of Advocacy of the Small Business Administration, more than 80 percent of federal procurement was concentrated in these categories in fiscal 2012:

  • Manufacturing, with nearly $200 billion.
  • Professional, scientific and technical services, with about $141 billion.
  • Administration and support, waste management and remediation, with about $43 billion.
  • Construction, with about $35.44 billion.

But within that massive chunk of contract spending, how much is making its way to small business?  For three of the four categories, not enough to meet the federal goal of 23 percent, according to the report.

Keep reading this article at: http://www.bizjournals.com/washington/blog/fedbiz_daily/2014/06/4-sectors-where-mostfederal-procurement-is.html