Marines could do a better job on small biz contracts, IG says

Marine Corps Systems Command is failing to adequately ensure small business contractors get access to defense contracts, according to an Inspector General’s report.

Marine CorpsThe report found that the Quantico, Virginia-based command had not ensured small business contractors had opportunities to subcontract on 12 prime contracts valued at $221 million, offered no compliance tracking on four contracts, did not follow up on large businesses not meeting small business-goals and awarded contracts without subcontracting plans.

“As a result, small businesses may have been denied subcontracting opportunities that large businesses were required to make a good faith effort to provide,” the report said. “In addition, MCSC contracting officials did not determine whether the prime contractors are making good faith efforts to comply with negotiated subcontracting goals and whether liquidated damages should be assessed.”

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Another shocker in veteran-owned business Supreme Court case: Oral argument suspended

The Kingdomware SDVOSB/VOSB Supreme Court case, which had been scheduled for an oral argument on Monday November 9, is suddenly in a state of limbo.

In an order issued on November 4, 2015, the Supreme Court yanked the case from its docket.  The Court directed the parties to submit briefs on whether the contracts in question have been fully performed, and if so, whether full performance renders the case moot.

For Kingdomware and veteran-owned companies everywhere, this is extremely troubling news.  If the Court believes that the case is moot, it will be dismissed – meaning that Kingdomware would lose the war without even getting its day in court.

Briefs from both sides are due November 20, and each side may reply by December 1.

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SBA: White House focus, SES visibility help agencies meet small business goals

The government’s success in meeting mandatory small business contracting goals two years running is due largely to White House focus and new requirements that program managers in the Senior Executive Service pay greater attention to the acquisition process, the Obama administration’s small-business development chief said on Tuesday.

SBA logo smallMany call set-asides for small business “not a handout but a hand-up, but I say it’s a matter of survival for the federal government as a whole,” said John Shoraka, associate administrator of government contracting and business development at the Small Business Administration (SBA). He spoke to contractors gathered for American Express OPEN’s all-day summit with agency acquisition officials working with small businesses that are women- or minority owned or economically disadvantaged.

Outlining the government’s efforts to institutionalize the success of meeting the goal of steering 23 percent of contract dollars to small business, Shoraka said, “I’ve told my staff I could write a book saying that America’s secret weapon is small business procurement — when small business is engaged, the industrial base is preserved. It’s win-win, because companies hire employees, which has impact on the economy.”

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Government small business data includes billions to Fortune 500 firms

An analysis by the American Small Business League (ASBL) has uncovered 179 Fortune 500 firms and their subsidiaries received federal small business contracts in fiscal year 2014. The study was based on the most recent information available from the Federal Procurement Data System (FPDS).

The largest recipient of federal small business contracts was Verizon. Some of the other firms that received federal small business contracts in recent years include: Chevron, Apple, General Electric, AT&T, CVS, Hewlett Packard, UPS, Bank of America, Home Depot, Target, Microsoft, Wells Fargo, Pepsi, Coca-Cola, Boeing, Oracle, Raytheon, Lockheed Martin, General Dynamics, Northrop Grumman, Honeywell International, BAE Systems, Rolls-Royce, Sears and John Deere.

The ASBL research is consistent with the recent investigative report released by Public Citizen titled “Slighted: Accounting Tricks Create False Impression That Small Businesses Are Getting Their Share of Federal Procurement Money, and the Political Factors That Might Be at Play.”

ABC, CBS, NBC, CNN, CNBC, MSNBC, Fox News and RTTV along with dozens of stories in many of the largest newspapers in the country have all reported on the fraud and abuse in federal small business contracting programs.

As early as 2003, the Government Accountability Office uncovered over 5,300 large businesses were receiving federal small business contracts.

On June 26, the Pentagon and the SBA ignored the results of the May 6 Public Citizen report and held a joint meeting to claim 24.99 percent of all federal contracts were awarded to small businesses. Billions in contracts to Fortune 500 firms and their subsidiaries were included in that number.

sba-logoThe research by ASBL, Public Citizen and federal investigators has found the SBA’s data to be significantly inflated in two ways. The SBA uses a rule they fabricated called the “exclusionary rule” to use a much lower federal acquisition budget in calculating the percentage of awards to small businesses. The SBA also unlawfully created a “five year rule” to include billions of dollars in contracts to Fortune 500 companies and their subsidiaries in their small business data.

Both the “exclusionary rule” and the “five year rule” have no basis in law and are in direct conflict with the provisions of the Small Business Act. The Small Business Act defines a small business as having no more than 1500 employees and requires small businesses receive “not less than 23 percent of the total value of all prime contract awards for each fiscal year.

The House Small Business Committee unanimously adopted an amendment to call for a new GAO investigation into fraud in federal small business contracting programs, based on research done by Chapman’s ASBL.

Senate Small Business Committee Chairman, David Vitter, has demanded that SBA Administrator Maria Contreras-Sweet provide him with a complete list of all firms that received federal small business contacts in fiscal year 2014 for an upcoming hearing on the issue.


SBA says government beat small business contracting goal for 2nd consecutive year

The federal government awarded 25 percent of its prime contracting dollars to small businesses in fiscal 2014, according to the Small Business Administration (SBA).

SBA logoThat marks the second consecutive year that federal agencies have met the government’s 23 percent small business contracting goal, something rarely achieved in the past.

There are some caveats: some contracts, such as contracts awarded for overseas work, are excluded from the base of contracts considered in this goal report. If they were included, the small business share of total contracts likely would be lower. Plus, there are bound to be cases where contracts that were awarded to large businesses were mistakenly counted as small business contracts.

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Skeptical Senate chairman asks SBA for list of every contractor it counted as a small business

A Senate chairman has asked the Small Business Administration to provide him with a list of every company that was counted toward the federal government’s small business contracting goal in 2014.

Last year, the SBA reported the government had met its goal of awarding small businesses 23 percent of all federal contracting dollars for the first time in eight years.

Senate Committee on Small Business and Entrepreneurship

“We’re expecting even better results when we release the 2014 scorecard in the coming weeks,” SBA Administrator Maria Contreras-Sweet said May 8, during a White House event honoring National Small Business Week award winners.

But a report by Public Citizen (see questioned the accuracy of the SBA’s procurement report for 2013. It found that contracts awarded to giant federal contractors such as Lockheed Martin were counted as small businesses in the SBA’s numbers. This is just the latest example of flaws in the SBA’s contracting data though the years.

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SBA to include overseas contracts in rating agencies

The Small Business Administration will begin to include overseas contracts as part of the baseline used to rate agency performance against small business contracting goals.

SBA logoCurrently about $100 billion a year in federal contracts — including contracts that support overseas projects — aren’t considered when the agency calculates small businesses’ share of procurement dollars annually. It’s been a bone of contention among the small business community, which argues that all awarded contracts should factor into individual ratings, as well as the overall goal of federal government to allocate 23 percent of contracts to small businesses.

“Overseas contracts, we couldn’t find a justification to continue to exclude that,” said John Shoraka, associate administrator of government contracting and business development at the SBA, during a keynote session at a procurement conference hosted by the Montgomery County Chamber of Commerce. “So coming into 2016, we’re working with the Office of Federal Procurement Policy, Defense, USAID and State on including those contracts in the base.”

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Congress moves forward on measures for small business contractors

Under the direction of former Chairman Sam Graves (R-Mo.), the House Small Business Committee over the past six years made overhauling the federal contracting process one of its top priorities, spearheading a number of initiatives intended to funnel more work – and by extension, taxpayer money – to small businesses. When Graves stepped down from the panel at the end of last year, it was unclear whether that effort would continue, or at least whether it would remain near the top of the committee’s to-do list.

Instead, it’s like he never left.

Now led by Rep. Steve Chabot (R-Ohio), the small business committee has picked up right where Graves left off. Chabot and crew recently held a series of hearings on a number of challenges facing small contractors, and last week, the panel marked up and approved a comprehensive package of changes stemming from those conversations.

“We know that when small businesses compete for federal work, it creates jobs, improves the quality of work, and saves taxpayers’ money,” Chabot said when rolling out the proposal, calling the proposed bill – dubbed the Small Contractors Improve Competition Act – “a commonsense approach to make sure that Washington is working with Main Street.”

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Small business federal contracting would change under House bill

The chairman of the House Small Business Committee introduced a bill that would include more categories for small businesses to get federal contracts.

The bill (H.R. 1481), introduced by Rep. Steve Chabot (R-Ohio), would increase the number of industries small businesses can compete for contracts as well as identifying new ways to attract small businesses in those new industry categories.

“Small business contracting policies are intended to make sure we have a broad spectrum of small firms working with the government across industries, and when those policies are undermined, it is imperative that we find appropriate solutions,” Chabot says in a March 20 statement.

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Deadline for comments is Feb. 27 on proposed rule affecting small business federal contracts

Are you a small business owner doing business with the government?  As previously reported here, the Small Business Administration (SBA) recently published a proposed rule to implement Section 1651 of the National Defense Authorization Act of 2013 (NDAA), proposing to change several key areas that could impact you:

  • The performance requirements applicable to small business and socioeconomic program set aside contracts and small business subcontracting.
  • The nonmanufacturer rule and affiliation rules.
  • The performance requirements for joint ventures.

From the SBA’s point of view, the proposed regulations should benefit small businesses by allowing small business concerns to use similarly-situated subcontractors in the performance of a set-aside contract, thereby expanding the capacity of small business prime contractors and potentially enabling small businesses to compete for and win larger contracts. SBA also believes the proposed rules will strengthen the small business subcontracting provisions, which may result in more subcontract awards to small business concerns. The proposed regulations also seek to address or clarify issues that are ambiguous or subject to dispute, thereby providing clarity to federal contracting officers as well as small business concerns.

Have comments? Visit the Federal Register online for information and to submit your comments by February 27, 2015.