Pentagon’s top contracting official: Sequestration’s cuts could continue into FY14, disproportionately affecting small businesses
June 5, 2013 by cs
Sequestration spending cuts could continue into 2014, and the impact of the deep cuts will fall disproportionately on small business, the Pentagon’s top acquisition official told a Navy industry forum on Monday of this week (June 3, 2013).
“It’s a reasonable possibility that we will go into 2014 with sequestration still underway,” said Frank Kendall, undersecretary of defense for acquisition, technology and logistics. “A lot of things we planned on doing we won’t be able to do.”
Last month, Defense Secretary Chuck Hagel told Defense Department employees he could not guarantee that the budget situation would ease next year.
Kendall’s comments to the 2013 Navy Opportunity Forum in Arlington, Va., come three months into a budget sequester that is taking $41 billion out of the Pentagon budget this fiscal year, leading to cuts across the military in everything from operations and deployments to training and readiness. Furloughs are set to begin in July for about 85 percent of the Defense Department’s 767,000 civilian employees.
In the sequestration environment, Kendall said, the department needs to be more proactive in taking care of the small businesses that contract with the military.
“The cuts we are going to experience potentially will fall on small businesses,” more than on large military contractors, he said, adding that cuts in research and development worry him as well. “Potential adversaries are modernizing at a rate which makes me nervous,” he told the group, which included representatives of companies that produce advanced technologies funded by Navy programs.
Kendall said the department is about to conclude its strategic choices and management review, which Hagel ordered to provide department leaders with options given the current budget environment as well as the prospect of future spending cuts.
“What would we have to do at the department if we had to take $50 billion a year out over the long term? That would be pretty devastating,” Kendall said, mentioning one such scenario being considered by the review.
Posted by the American Forces Press Service at http://www.defense.gov//news/newsarticle.aspx?id=120200.
May 20, 2013 by cs
The General Services Administration collectively owes more than one thousand contractors more than $3 million because the agency failed to pay off vendors after kicking them out of the schedules program. The finding came as the result of an investigation by the House Small Business Committee.
The agency failed to pay some terminated contractors a $2,500 guarantee it makes to all vendors that join the schedules program.
“The General Services Administration has owned up to their mistake and will distribute payment this year,” said Committee Chairman Sam Graves (R-Mo.).
If schedule holders don’t make at least $25,000 worth of schedule sales in the first two years and $25,000 annually thereafter, GSA may cancel the contracts.
May 14, 2013 by cs
Federal, state and local government agencies frequently host trade shows or expos to publicize their contract opportunities and attract new vendors. Wonder whether you should attend a government-sponsored business expo? What should you expect if you go? How should you prepare? Are you disappointed in the last trade show you attended?
These are the kinds of questions often posed by clients of the Georgia Tech Procurement Assistance Center (GTPAC). Fundamentally, businesses want to know how they can gain a competitive advantage by attending an event sponsored by a government agency. The answer lies as much in preparation and follow-up as it does in actual attendance.
GTPAC Counselors believe these kinds of events are what you make them. If you go to just listen, you may come away disappointed. If, on the other hand, you go to make something happen, you can come away with some good contacts,valuable insights, and solid business leads.
Here are a few tips …
- Establish some objectives for yourself – what do you hope to accomplish by attending? State this in concrete, quantifiable terms.
- Think about the specific kinds of opportunities you want to go after and be prepared to explain how you represent the solution to the government’s contracting objectives.
- Identify who is going to be in attendance and research in advance as much as you can about who will be there and those persons you want to meet. Think about why they are going to the show and what they want to accomplish there – align yourself with their objectives.
- Familiarize yourself with all details of the show so that you can envision how you are going to use the structure of the show to accomplish your objectives.
- Be prepared with marketing materials, including business cards, brochures and/or product/service fact sheets, product samples/portfolio, and a detailed capabilities statement. (Don’t have a capabilities statement? See our article on this subject here.) Tailor at least one of your handouts to the expo or show itself.
- Be prepared to talk about pricing. You may not need to, but be prepared just in case someone asks.
- Begin to envision how your competitors at the show can be potential partners as a result of the show.
- Develop and be prepared to deliver a 30-second “elevator speech” which explains in layman’s terms exactly what you are an expert at doing. Don’t be shy to explain what’s special about your company and why your products/services are the best. (If you need help constructing an elevator speech, see our article at http://gtpac.org/2010/07/whats-an-elevator-pitch-and-why-you-need-one.)
- Remember that buyers don’t have time to waste. Buyers want specific information, and buyers want to know what’s special about you (that’s your competitive advantage).
- Preparation is essential. It’s better not to go than to go unprepared – you never have a second chance to make a good first impression.
- Dress to impress. And wear comfortable shoes!
- At the show, listen to how your competitors are selling themselves and learn as much about their marketing as possible. Also learn from their mistakes.
- Understand that follow-up after the show is critical. Gather all the business cards you collected, write follow-up notes or emails – promptly. Set-up follow-up meetings/conference calls, if possible and appropriate. Send more marketing materials.
- Write yourself a report on lessons-learned. Review this report before planning to participate in another event.
Your GTPAC Counselor will be glad to elaborate on this topic and provide you with additional advice. You can find our contact information right here.
© 2010 Georgia Tech Procurement Assistance Center – All Rights Reserved.
May 1, 2013 by cs
The National Veteran Small Business Coalition (NVSBC) is holding its annual Veteran Entrepreneur Training Symposium (VETS) for the 3rd consecutive year at the Silver Legacy Hotel in Reno, Nevada, on June 10-13, 2013.
VETS2013 will assemble more than 500 stakeholders to discuss how to take full advantage of federally-mandated contracting opportunities specifically for veteran-owned small businesses. The event includes representatives from the veteran small business community, federal agencies, and prime contractors who exchange knowledge and business opportunities in the classroom, the exhibit hall, and in the one-on-one business sessions.
Complete conference details, including registration information, can be found at http://www.veterantrainingsymposium.com.
You also can follow conference and sponsor developments at:
April 15, 2013 by cs
NOTE: This event is now full and no further registrations are being taken. The Centers for Disease Control & Prevention (CDC), a unit of the US Department of Health & Human Services (HHS), is holding a small business outreach event in Atlanta on May 3, 2013. The Georgia Tech Procurement Assistance Center is acting as the host for this event.
This will be a day-long event, beginning with presentations by officials from Health and Human Services, the CDC and other agencies regarding their upcoming contracting opportunities, small business initiatives, and available resources. The afternoon will consist of appointments between attendees and representatives of the following agencies: CDC, U.S. Army Corps of Engineers, the Dept. of Veterans Affairs, General Services Administration, the Environmental Protection Agency, and the Small Business Administration.
Registration for this event is now open. Due to space limitations, YOU MUST REGISTER IN ADVANCE IN ORDER TO ATTEND. Click here to register: http://gtpac.ecenterdirect.com/ConferenceDetail.action?ID=7550.
This small business outreach event is being held by the Centers for Disease Control & Prevention (CDC), and features participation by several additional federal agencies. This is a day-long event, begins with presentations by officials from Health and Human Services, the CDC and other agencies regarding their upcoming contracting opportunities, small business initiatives, and available resources.
The afternoon consists of 20-minute appointments between attendees and representatives of the following agencies: CDC, U.S. Army Corps of Engineers, the Dept. of Veterans Affairs, General Services Administration, the Environmental Protection Agency, and the Small Business Administration. Appointment-setting with individual agencies will be done in advance, but only after initial registration (using the link above). On or about April 24, 2013, each registrant will be emailed another link to accomplish the appointment-setting.
There will be a limit to the number of appointments each person may set. In addition to the appointments, training sessions will be going on throughout the afternoon.
Networking begins at 8:00 am. Presentations begin at 8:30 am and last until noon. Lunch on your own; box lunches will be available for purchase.
This event is being held at the Georgia Tech Research Institute’s Conference Center, located at 250 – 14th St., NW, Atlanta, GA 30318. There is free parking in the deck adjacent to the GTRI Conference Center.
April 1, 2013 by cs
The General Services Administration moved one step closer to launching an overarching contract vehicle for professional services Thursday by releasing two draft requests for proposals.
The agency is inviting comments on the draft RFPs and through its GSA Interact system.
The contract vehicle, known as One Acquisition Solution for Integrated Services, or OASIS, would include contracts for accounting, communication, security and transportation, among other services.
OASIS would be an indefinite delivery, indefinite quantity contract that would last 10 years in its first incarnation, according to the draft RFPs. GSA’s two draft solicitions were a general RFP and another focused on small businesses.
March 22, 2013 by cs
President Obama in 2009 told federal agencies that no-bid contracts were “wasteful’’ and “inefficient.’’ Four years later, his administration spent more money on non-competitive contracts than ever before.
Federal agencies awarded $115.2 billion in no-bid contracts in fiscal year 2012, an 8.9 increase from $105.8 billion from 2009, according to government data. The jump unfolded even as total contract spending decreased by about 5 percent. Lockheed Martin, Boeing and Raytheon were top recipients of sole-source contracts.
Those top Pentagon vendors and other large contractors can draw on established relationships with procurement officers to claim a greater share of non-competitive work, said Robert Burton, former acting administrator of the Office of Federal Procurement Policy under George W. Bush.
“It highlights a growing problem in the procurement system,’’ said Burton, who represents contractors as a partner at Venable in Washington. “The pie is shrinking, but at the same time, the number of non-competitive awards has increased. That’s a bad combination.”
Keep reading this article at: http://www.washingtonpost.com/business/economy/no-bid-us-government-contracts-jump-9-percent-despite-push-for-competition/2013/03/17/9f6708fc-8da0-11e2-b63f-f53fb9f2fcb4_print.html
Contractors plead guilty to illegally obtaining $31 million in contracts intended for small businesses
March 20, 2013 by cs
Executives at two Arlington, Va.-based businesses have pleaded guilty to fraudulently obtaining more than $31 million in government contract payments that should have gone to disadvantaged small businesses.
The guilty pleas were announced today by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and NASA Inspector General Paul K. Martin.
“These executives used their knowledge and experience to abuse a program created to ensure minority small business owners could compete for government contracts,” said U.S. Attorney MacBride. “They not only illegally obtained millions from the United States, they also victimized legitimate minority owners who didn’t get the bids.”
“Keith Hedman and his co-conspirators fraudulently obtained valuable government contracts intended for minority-owned small businesses, and pocketed millions of dollars for themselves,” said Acting Assistant Attorney General Raman. “They abused an important government program, and will now face the consequences.”
“This investigation confirmed that these executives repeatedly took actions that gave them a fraudulent advantage in the contracting process,” said NASA Inspector General Martin. “I commend the outstanding efforts of our agents and our law enforcement partners involved in this case in protecting the integrity of the 8(a) program.”
According to court documents, Keith Hedman, 53, of Arlington, formed an Arlington-based security service consulting company in approximately 2001. Hedman formed the company, listed as Company A in court filings, with an African-American woman who was listed as its president and CEO to enable the company to participate in the Small Business Administration’s (SBA) Section 8(a) program, which enables certain small businesses to receive sole-source and competitive-bid contracts set aside for minority-owned and disadvantaged small businesses. In 2001, Hedman’s company received approval to participate in the 8(a) program on the basis of the African-American president and CEO’s listed role, but when she left the company in 2003, Hedman became its sole owner and the company was no longer 8(a)-eligible.
Hedman admitted that in 2003 he created a shell company, listed as Company B in court records, to ensure he could continue to gain access to 8(a) contracting preferences for which Company A was not qualified. Prior to applying for the shell company’s 8(a) status, Hedman selected an employee, Dawn Hamilton, 48, of Brownsville, Md., to serve as a figurehead owner based on her Portuguese heritage and history of social disadvantage, when in reality the new company would be managed by Hedman and senior leadership at Company A. To deceive the SBA, they falsely claimed that Hamilton formed and founded the company and that she was the only member of the company’s management. They continued to mislead the SBA through 2012, even lying to the SBA to overcome a protest filed by another company accusing Hedman’s former company and the shell company of being inappropriately affiliated.
From Company B’s creation through February 2012, Hedman – not Hamilton – exercised ultimate decision-making authority and control over the company by controlling its finances, allocation of personnel and government contracting activities. Hedman nonetheless maintained the impression that Hamilton was leading the company, including through forgeries of signatures by Hamilton to documents she had not seen or drafted. Hedman also retained ultimate control over the shell business’s bank accounts throughout its existence. In 2011, Hedman withdrew $1 million in cash from Company B’s accounts and gave the funds in cash to Hamilton and three other co-conspirators. In total, Hedman and Hamilton secured through the shell company more than $31 million in government contract payments, which generated more than $6 million in salary and payments for the conspirators that they were not entitled to receive.
In addition, Hedman admitted that he agreed to pay a $50,000 bribe through the shell business to a U.S. government contracting official for the official’s help in securing contracts for Company B.
Hedman and Hamilton pleaded guilty on March 13 and March 15, 2013, respectively, in U.S. District Court for the Eastern District of Virginia to major government fraud and face a maximum penalty of 10 years in prison and a multimillion-dollar fine for that charge. Hedman also pleaded guilty to conspiracy to commit bribery, which carries a maximum penalty of five years in prison. Hedman agreed to forfeit more than $6.3 million, and Hamilton agreed to forfeit more than $1.2 million. Hedman is scheduled to be sentenced on June 21, 2013, before U.S. District Judge Gerald Bruce Lee. Hamilton’s sentencing is scheduled for June 21, 2013, before U.S. District Judge T. S. Ellis, III.
In addition, the following individuals have also pleaded guilty to major fraud or conspiracy to commit major fraud:
• David George Lux, 62, of Springfield, Va., pleaded guilty today before U.S. District Judge Leonie M. Brinkema. Lux served as the chief financial officer at Company A from 2007 through February 2012 and performed work for Company B throughout that time while officially on Company A’s payroll. He is scheduled to be sentenced on June 14, 2013, by Judge Brinkema.
• Joseph Richards, 51, of Arlington, pleaded guilty on March 14, 2013, before U.S. District Judge Brinkema in the Eastern District of Virginia. Richards served as the chief operating officer and chief of staff for Company A from 2005 through 2008 and then vice president from 2010 through February 2012. He also served as Company B’s chief of staff from 2008 through 2010. According to court documents, Richards performed work for Company B throughout his time at both companies. He is scheduled to be sentenced on June 14, 2013, by Judge Brinkema.
• David Sanborn, 60, of Lexington, S.C., pleaded guilty on March 13, 2013, before U.S. District Judge Claude M. Hilton in the Eastern District of Virginia. Sanborn served as vice president at Company A from 2001 through 2009 and the company’s president from 2010 through February 2012. According to court documents, Sanborn performed work for Company B from its inception while on Company A’s payroll. He is scheduled to be sentenced on June 28, 2013, by Judge Hilton.
This case was investigated by the NASA Office of the Inspector General (OIG), the SBA OIG, the Defense Criminal Investigative Service, the General Services Administration OIG and the Department of Homeland Security OIG. Assistant U.S. Attorneys Chad Golder and Ryan Faulconer, a former Trial Attorney for the Criminal Division’s Fraud Section, are prosecuting the case on behalf of the United States.
– News release from U.S. Dept. of Justice – Mar. 18, 2013 – http://www.justice.gov/opa/pr/2013/March/13-crm-323.html
March 11, 2013 by cs
This article explains non-manufacturer waivers and what Federal agency contracting officers are responsible for. In addition, it explains the Small Business Administration’s non-manufacturer rule (NMR).
What is the Non-manufacturer Rule?
The Small Business Act and SBA’s regulations impose performance requirements (limitations on subcontracting) on firms that are awarded Federal set-aside contracts.
Applicable regulations are:
- 15 USC §§ 637(a)(14), 644(o);
- 13 CFR § 125.6;
- Federal Acquisition Regulation (FAR) §§ 52.219-14, 52.219-27
On a supply contract, a firm must perform at least 50% of the cost of manufacturing the supplies (not including the cost of materials).
The NMR is an exception to the performance requirements, and provides that a firm that is not a manufacturer may qualify as a small business on a supply contract set aside for small business if, among other things, it supplies the product of a small business made in the United States (15 USC § 637(a)(17); 13 CFR § 121.406).
What is the difference between a Manufacturer and a Non-manufacturer?
- A manufacturer is a concern which, with its own facilities, performs the primary activities in transforming inorganic or organic substances, including the assembly of parts and components, into the end item being acquired (13 CFR § 121.406(b)(2); FAR § 19.102(f)(1)).
- A concern may qualify a non-manufacturer if it:
- Does not exceed 500 employees;
- Is primarily engaged in the retail or wholesale trade and normally sells the type of item being supplied; and
- Will supply the end item of a small business manufacturer or processor made in the United States, or obtains a waiver of such requirement (13 CFR § 121.406(b)).
Non-manufacturer Rule Reminders
Federal contracting officers applying the Nonmanufacturer Rule are to abide by the following guidelines:
- The NMR does not apply to service contracts. The NMR is an exception to the manufacturing performance requirements (limitations on subcontracting) applicable to supply contracts. Service and construction contracts have different performance requirements. See 13 CFR § 125.6; FAR §§ 19.102(f), 19.502-2(c).
- Contracting officers are to designate the proper NAICS code and size standard in the solicitation, selecting the NAICS code which best describes the principal purpose of the product or service being acquired. Primary consideration is given to the industry description in the NAICS, the product or service description in the solicitation and any attachments to it, the relative value and importance of the components of the procurement making up the end item being procured, and the function of the goods or services being purchased.
- Wholesale or retail trade NAICS code are not be applied to a procurement for supplies.
- Non-manufacturer waivers are not granted for HUBZone procurements.
- Non-manufacturer waivers cannot be granted after bids on a solicitation have been received.
Non-Manufacturer Waiver Information
In order to qualify as a small business on a small business set-aside, Service-Disabled Veteran-Owned set-aside or 8(a) Business Development procurement (sole source or competitive) for the acquisition of supplies, an offeror must either manufacture the item in accordance with the Limitations on Subcontracting (see FAR section 52.219-14, 52.219-27 and 13 C.F.R. section 125.6) or supply the product of a small business made in the United States. The requirement that a non-manufacturer supply the product of a small business concern is commonly referred to as the Non-Manufacturer Rule (NMR) (13 C.F.R. section 121.406). The Small Business Act also contains provisions that allow the Administrator of the SBA to waive this requirement when there are no small business manufacturers or processors available to supply the product to the Federal Government. The Administrator has delegated the authority to make decisions on waivers of the Non-Manufacturer Rule to the Associate Administrator for Government Contracting in the following cases:
- Individual waiver. After reviewing a determination by a contracting officer that no small business manufacturer or processor can reasonably be expected to offer a product meeting the specifications (including period of performance) required of an offeror or by the solicitation; or
- Class waiver. For a product or class of products after determining that no small business is available to participate in the Federal procurement market.
For the purpose of waivers, a class of products is defined based on the Office of Management and Budget’s North American Industry Classification (NAICS) Manual and the General Services Administration’s Product and Service Code (PSC) Directory. Within each NAICS code and PSC are subdivisions of products that can be considered for waiver. A request for a waiver of a class of products should refer to a specific subdivision, or statement of product, within the NAICS and PSC.
Any individual or organization (government agency, business, association, etc.) may request a waiver for a class of products. The request should be in writing addressed to the Associate Administrator for Government Contracting and should specifically state the class (or classes) of products for which the waiver is sought.
Requesting the Individual Waiver
Contracting officers are the only ones who can request an individual waiver for a specific solicitation. At a minimum, waiver requests from contracting officers must include:
- A definite statement identifying the specific products for which a waiver is being requested, including market research documentation supporting the contracting officer’s determination that there are no known small business manufacturers or processors for the requested items.
- The solicitation number for the procurement on which the item(s) is required, the NAICS code, estimated dollar amount of the procurement, and a brief statement of the procurement history.
- For contracts expected to exceed $500,000, a copy of the Statement of Work.
- A determination by the procuring agency’s contracting officer that there are no known small business manufacturers for the requested items. The determination must contain a clear, narrative statement of the contracting officer’s efforts to search for small business manufacturers or processors of the item(s) and the results of those efforts. The information should include the findings of a search on the SBA’s Central Contractor Registration (CCR) “Dynamic Small Business Search” ; other market surveys performed; the results of discussions with small business representatives to find manufacturers (i.e., Office of Small Disadvantaged Business Utilization (OSDBU) Representative or Procurement Center Representative (PCR)); and, a statement by the contracting officer that there are no known small business manufacturers for the items and that no small business can reasonably be expected to offer the required supplies.
- A contracting officer may request an individual waiver for more than one item on a solicitation. The required information indicated above must be included for each item.
Requests for waivers of the Non-Manufacturer Rule should be sent to the Director for Government Contracting at: U. S. Small Business Administration, Office of Government Contracting, Mail Code 6700, 409 3rd Street, SW, Washington, DC 20416.
Anyone can request a class waiver. The requester should supply SBA with the relevant NAICS code and other identifying information concerning the item. The requester should also supply SBA with market research and other data to support a determination that no small business manufacturer is participating in the Federal procurement market.
Use the following format for submitting class waivers:
In accordance with 13 Code of Federal Regulations (Reference 12l.1204(a)(2)), the (your name and/or the name of your organization) hereby requests a class waiver of the Non-manufacturer Rule (NMR) for name of product(s)_______, under the North American Industry Classification (NAICS) code _______, Product Service Code (PSC) _____.
(Describe any background information relative to the product(s) you are requesting to be waived. Include detailed information on the efforts made to identify small business manufacturers or processors for the class.)
I can be reached at ( ) ______, fax number ( ) _______, and mailing address_______.
Send to: Director, Office of Government Contracting, U.S. Small Business Administration, 409 3rd Street, SW, MC 6700, Washington, DC 20416.
Timeframes for Handling
- A request for an individual waiver will take about 15 working days to process if the contracting officer provides complete information.
- Requests for waivers of classes of products take an average of 45 – 60 working days for processing.
This period of time allows SBA staff to publish Waivers of the Non-manufacturer Rule in the Federal Register, a required notice of an intent to grant a waiver for the class of products, a notice on the FedBizOpps web site of potential sources sought, and a final notice in the Federal Register of any decision to grant the waiver if no small business manufacturers or processors have been identified.
For questions about the Nonmanufacturer Rule, or questions on how to submit a waiver request, please contact SBA’s Edward Halstead at firstname.lastname@example.org
March 6, 2013 by cs
The Department of Defense (DoD) has issued a notice that DoD has discontinued its temporary practice of providing accelerated payments to all contractors. This new rule is found at 78 FedReg 12745, issued on Feb. 25, 2013.
DoD originally provided notice in the Federal Register at 77 FedReg 63298, on October 16, 2012, that it had taken steps to accelerate payments to all DoD prime contractors, in order to implement the temporary policy established in OMB Memorandum M-12-16, Providing Prompt Payment to Small Business Subcontractors (July 11, 2012).
With the latest notice, DoD discontinues its temporary practice of accelerating payments to all prime contractors. This action does not affect DoD’s policy to assist small business prime contractors by paying them as quickly as possible after receipt of an invoice and all proper documentation, while also maintaining necessary DoD internal controls.
DoD plans to continue phased implementation of the policy at DFARS 232.903 and 232.906. This notice is effective February 25, 2013.