September 29, 2014 by cs
On September 24, 2014, the Small Business Administration’s Office of Inspector General (OIG) issued Evaluation Report 14-18, Agencies are Overstating Small Disadvantaged Business and HUBZone Goaling Credit by Including Contracts Performed by Eligible Firms. This report presents the results of an evaluation of select Section 8(a) Business Development Program and Historically Underutilized Business Zones (HUBZone) contract awards.
The OIG identified over $400 million in contract actions that were awarded to ineligible firms, which may have contributed to the overstatement of small business goaling dollars for the Small Disadvantaged Business and the HUBZone Business preference programs in FY 2013. Besides reporting inaccurate information in Federal Procurement Data System-Next Generation (FPDS-NG), procuring agencies may have limited contracting opportunities for firms currently participating in the 8(a) or HUBZone programs.
Further, the OIG found that HUBZone and 8(a) certification information is not consistently transmitted to the Dynamic Small Business Search (DSBS) and the System for Award Management (SAM). As a result, the affected small businesses are not getting the visibility in the DSBS database, especially the HUBZone firms, and as a result, may impact federal agencies in meeting their HUBZone procurement goals.
Additionally, the OIG also identified over $1.5 billion dollars in contract actions for which the firms were in the programs at the time of contract award, but in FY 2013 were no longer in the 8(a) or HUBZone programs. Specifically, SBA regulations permit procuring agencies to claim Small Disadvantaged Business and HUBZone goaling credit on certain contract actions even after firms have left the program. In the opinion of the OIG, the amount of dollars the SBA reports to Congress and the public as being performed by 8(a) and HUBZone firms in the Small Business Goaling Report is significantly impacted by the inclusion of contract actions performed by former program participants.
The OIG made two recommendations to SBA’s Associate Administrator for Government Contracting and Business Development intended to strengthen controls between SBA databases on certification data of 8(a) and HUBZone firms and information reported in FPDS-NG. The recommendations are:
- In coordination with the Office of Federal Procurement Policy and the General Services Administration, the SBA should strengthen controls between the SBA’s Dynamic Small Business Search Database and the System for Award Management to ensure accuracy of 8(a) and HUBZone certification data in FPDS-NG.
- The SBA should modify DSBS so that a firm’s profile and certification information for HUBZone and 8(a) status remains visible and accurate to agency contracting officers, or develop an alternate list to verify a firm’s status.
The OIG reports that SBA’s management has agreed to pursue both recommendations.
August 25, 2014 by cs
In the sixth of its annual studies, a small business advocacy group has again blasted the government for allegedly awarding contracts to major corporations when policy intends for them to go to legitimate small businesses. The Small Business Administration offered other possible explanations for the apparent discrepancies.
The Petaluma, Calif.-based American Small Business League’s new study of fiscal 2013 procurement data concluded that of the top 100 companies receiving the highest-valued small business federal contracts, “79 were large companies that exceeded the SBA’s small business size standards, five were anomalous and 16 were legitimate small businesses.”
The group’s annual studies also show that the number of top-100 contracting companies that are large firms has risen steadily, from 60 in fiscal 2009 to 84 in fiscal 2013.
The large corporations that received the contracts in question in fiscal 2013 included Lockheed Martin Corp., General Dynamics Corp., Boeing Co., General Electric, Oracle Corp., Apple Inc., Verizon, Bank of America Corp., Citigroup Inc., PepsiCo, Comcast Corp., Intel Corp., John Deere Co. and many more, said the league, which published brief company-by-company profiles.
Keep reading this article at: http://www.govexec.com/contracting/2014/08/how-many-big-contractors-are-actually-posing-small-businesses/91694
August 11, 2014 by cs
A large business was appropriately awarded a “Marginal” score for small business participation based on the large business’s history of failing to meet its small business subcontracting goals.
In a recent bid protest decision, the GAO held that the procuring agency properly assigned the large business a low score based on the large business’s history of unmet subcontracting goals, even though the large business apparently pledged to subcontract a significant amount of work to small businesses under the solicitation in question.
The GAO’s decision in Cajun Constructors, Inc., B-409685 (July 15, 2014) involved an Army Corps of Engineers solicitation for the construction of a concrete-covered canal in Louisiana. The solicitation was issued in an unrestricted basis. Award was to be made to the offeror presenting the best value to the government, considering price and four non-price factors: past performance, technical approach, key personnel and project management plan, and small business participation plan.
Keep reading this article at: http://smallgovcon.com/gaobidprotests/large-businesss-unmet-subcontracting-goals-result-in-marginal-score/
August 4, 2014 by cs
The U.S. Small Business Administration (SBA) announced on August 1, 2014 that the federal government reached its small business federal contracting goal for the first time in eight years, awarding 23.39% in federal contracts to small businesses totaling $83.1 billion of eligible contracting dollars. The government’s annual small business contracting goal is 23%.
The SBA’s report is for FY13, or the 12-month period ending September 30, 2013.
“When we hit our small business procurement target, it’s a win. Small businesses get the revenue they need to grow and create jobs, and the federal government gets the chance to work with some of the most responsive, innovative and nimble companies in the U.S. while the economy grows,” said SBA Administrator Maria Contreras-Sweet.
Performance in four out of five of the small business prime contracting categories showed significant improvement, with increases in performance against statutory goals. While contract dollars have gone down in all categories as a result of overall reduced federal spending, small businesses still secured a greater percentage of the contracting dollars.
Alongside the announcement, the SBA released its FY 2013 Small Business Procurement Scorecard, which provides an assessment of each federal agency’s yearly small business contracting achievement against its goal. Overall, the federal government received an “A” on SBA’s government-wide Scorecard. Twenty individual agencies receiving an A or A+. Three agencies were given a B. One agency, the Department of Energy, received a failing grade, awarding only 7% of its contracts to small businesses in FY13.
The individual agency scorecards released by the SBA, as well as a detailed explanation of the scorecard methodology, is available online at http://go.usa.gov/Nxxd.
July 8, 2014 by cs
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.
July 1, 2014 by cs
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
June 19, 2014 by cs
Ask any small-business chief executive competing in the federal market, and he or she will tell you that finding a niche within the competitive spectrum has become increasingly difficult.
Some small businesses find themselves competing against larger businesses that have ventured into smaller contracts. With the Small Business Administration’s changes to business size standards in 2012, some small businesses also find themselves competing against much larger — but now small, by definition — businesses for set-asides.
Despite these challenges, the current government contracting environment encourages small-business participation. More than $51 billion in 2013 contract obligations went to small business via set-aside contracts, and although the total dollar figure is declining, the percentage of total obligations is increasing.
Small-business contracting continues to be a priority for contracting offices, which are under increasing scrutiny regarding small-business utilization. These offices have the burden of proof and must justify not using a set-aside for certain requirements. The Obama administration and Congress are also helping shape the path with policies that address small-business competition.
Keep reading this article at: http://www.washingtonpost.com/business/capitalbusiness/when-it-comes-to-winning-contracts-small-businesses-need-to-think-strategically/2014/06/06/64bc1b7e-ea6b-11e3-b98c-72cef4a00499_story.html
June 18, 2014 by cs
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.
Known 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.
All 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.
June 10, 2014 by cs
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
June 3, 2014 by cs
Sometimes, it’s the most subtle nuances in a phrase that matter most — and for small government contractors, that appears to be the case in the federal procurement rulebook.
The Federal Acquisition Regulation, a long list of government-wide contracting rules established by the heads of several federal agencies, requires all large companies bidding on prime contracts to specify what percentage of the money awarded would flow through to small-business subcontractors.
The rule is meant to ensure that small firms “have the maximum practicable opportunity to participate in performing contracts,” according to the FAR, and to help the government meet its annual goal of awarding 35.9 percent of all subcontracting dollars to small companies. Collectively, federal agencies have missed that mark each of the last five years.
Bob Justis says one odd word on page 1,343 in the rulebook isn’t helping.
“Out of all your planned subcontracting dollars, you’re required to set aside some percentage of that for small businesses,” Justis, head of Justis Consulting, a contracting proposal development firm based in Washington, said in a recent interview. “However, it’s required to be stated as a percentage of your total subcontract dollars — not as a percentage of the total contract dollars.”
It’s a subtle but important distinction, Justis explained, because a large prime contractor can, based on that rule, pledge to commit 40 percent of its subcontracting dollars to small businesses. If the company then handles all the work itself, resulting in a total subcontracting spend of zero, it still met its small-business subcontracting goal.
After all, 40 percent of nothing is nothing.
Keep reading this article at: http://m.washingtonpost.com/business/on-small-business/how-one-small-word-change-could-mean-many-more-contracting-dollars-for-small-businesses/2014/05/22/30b4c0d8-e106-11e3-9743-bb9b59cde7b9_story.html