DoD discontinues accelerated payments to prime contractors; small businesses exempt

March 6, 2013 by

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.

Small business certification is a thorny issue

March 5, 2013 by

The ever-evolving small business government contracting landscape presents myriad ethical quandaries for small businesses seeking set-aside and sole source contracts.

Rules governing eligibility for various small business programs are becoming more complex with amendments and case law interpretation.  Hence, whether a firm is eligible for a particular small business program or procurement often presents a thorny question.

Small business government contracting programs generally rely upon a contractor’s self-certification. To
compete, a company usually only needs to certify — with no government verification — that it meets a small business program’s requirements.

Notable exceptions include the Small Business Administration’s 8(a) business development program and Historically Underutilized Business Zone (HUBZone) program and the Department of Veterans Affairs’ Veterans First contracting program for Veteran-Owned and Service-Disabled Veteran-Owned Small

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Pentagon to slow contractor payments to boost cash reserve

February 28, 2013 by

The U.S. Defense Department will slow payments to prime contractors in the coming week in an attempt to increase its on-hand cash as defense spending cuts loom.

Pentagon officials said changing these payment processes combined with other initiatives will add about $1 billion, or a few days worth, of available cash within working capital spending accounts. DoD will begin notifying contractors of these payment changes in the coming days.

The Pentagon is facing a $46 billion reduction to its 2013 budget between March and September should across-the-board defense spending cuts, known as sequestration, go into effect.

Also complicating matters is that DoD is operating under a continuing resolution, which freezes spending at 2012 budget levels, creating an $11 billion shortfall from planned 2013 spending. The continuing resolution also keeps funds aligned in the same accounts as 2012, meaning new programs cannot start and ones that have been terminated are still receiving money.

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SBA triples surety bond guarantee ceiling

February 15, 2013 by

A major revision in the U.S. Small Business Administration’s Surety Bond Guarantee (SBG) Program more than triples the eligible contract amount, from $2 million to $6.5 million, the Agency will guarantee on surety bonds for both public and private contracts. The higher surety bond guarantee limits are expected to help construction and service sector small businesses gain greater access to private and public contracts and secure larger contracts vital to small business growth.

“These new contract ceilings are one more way we can help small businesses, particularly in the construction and service sectors, compete for and win critical contracting opportunities that help them grow their businesses and create jobs,” SBA Administrator Karen Mills said. “Additionally, these changes, which are enthusiastically supported across the surety industry and small business community, will help spur economic growth and recovery in areas that have been hard hit by disasters, bringing jobs and economic activity to regions at a time when it is needed most.”

The revisions are a result of the Fiscal Year 2013 National Defense Authorization Act and are expected to bolster participation by surety bond agents and brokers and their surety companies in SBA’s SBG Program.

The changes also allow SBA to guarantee bonds for government contracts valued at up to $10 million if a contracting officer of a federal agency certifies that the guarantee is necessary for the small business to obtain bonding, and it is in the best interests of the government.

SBA partners with the surety industry to help small businesses that would otherwise be unable to obtain bonding in the traditional commercial marketplace. Under the partnership, SBA provides a guarantee to the participating surety company of between 70 and 90 percent of the bond amount if a contractor defaults or fails to perform.

SBA assistance in locating a participating surety company or agent, and completing application forms, is available online. For more information on SBA’s Surety Bond Guarantee Program, including Surety Office contacts, go online to: or call 1-800-U-ASK-SBA.

Head of SBA steps down

February 14, 2013 by

Karen Mills, head of the Small Business Administration, told agency staff Monday she is stepping down after four years at the helm.

Mills will continue to lead the agency until her successor is named, according to a notice posted on SBA’s web site.

She said small businesses have won more than $286.3 million in federal contracts over the last three years of reporting, $32 billion more than the previous three years.

The agency also supported more than $106 billion in loans to more than 193,000 small businesses and entrepreneurs, including two record years of delivering more than $30 billion annually in loan guarantees, she said.

SBA brought more than 1,000 community banks into SBA lending and secured $20 billion commitment from 13 banks to increase their small business lending over three years, Mills said.

Procurement Opportunities Guide now available at no cost

January 30, 2013 by

The 2013 edition of Braddock’s Procurement Opportunities Guide, An Entrepreneur’s Guide to Selling to Governments and Corporations, is now available to GTPAC clients at no charge!

Braddock’s Procurement Opportunities Guide is a primer designed to help small business owners and decision makers understand the government procurement and private sector procurement spaces.  The Guide provides an overview of government and corporate markets with an emphasis on who buys and how buying decisions are made.  The Guide also presents “next step” resources for federal and state governments and the private sector.

Topics covered by the Guide include:

  • Selling to the federal government/state governments
  • Selling to large corporations
  • Selling to foreign governments and international organizations
  • “Green” procurement
  • Special resources for Women-, Minority, and Veteran-owned businesses
  • A glossary of procurement related terms, a procurement preparation checklist, information about teaming agreements and joint ventures, and more.

Braddock’s Procurement Opportunities Guide is published and copyrighted by Braddock Communications, Inc.  This special PDF edition of Braddock’s Procurement Opportunities Guide is available at no charge to you thanks to the generous support of Microsoft Corporation.

Download the Guide here:


Changes to GSA Schedules program likely in 2013

January 29, 2013 by

Anyone monitoring government contracting in the last few years has noticed a surge in U.S. General Services Administration (GSA) Schedule contracts. As of fiscal year 2012, GSA had over 19,000 Schedule contracts. According to GSA, approximately 10% of federal procurement dollars went through GSA Schedule contracts last year representing nearly $50 billion in spending.  Considering 80% of GSA Schedule contracts are with small businesses, proposed changes to the GSA Schedule program in 2013 will surely impact small businesses.

The first of these changes, spearheaded by SBA, intends to ensure more small businesses reap the benefits of the GSA Schedule program. While small businesses represent 80% of GSA Schedule contract holders, only 36% of contract sales go to small businesses.

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White House to expand small business access to federal innovation, grants

January 15, 2013 by

The Obama administration plans to help small businesses access new markets  quicker by giving them better access to technology developed in federal  laboratories, as well as by expanding grant programs.

As part of its recently updated small business cross agency priority framework, the administration says it wants agencies to take steps to streamline  the process for private-public research partnerships so that startups can access  research and development grants 50 percent faster.

Keep reading this article at: White House to expand small business access to federal innovation, grants – FierceGovernment


Legislation signed to deliver more government contracts to small businesses

January 7, 2013 by

Washington’s elected officials are taking new steps to direct more government work to small businesses, just as contractors are bracing for the threat of sequestration.

President Obama on Tuesday signed as part of the military spending budget a series of provisions to help small firms compete for more federal contracts and ensure that agencies take their annual small business contracting goals more seriously. Most notably, the law requires that small business contracting performance be part of employee reviews for senior agency officials, which factor into their consideration for bonuses and promotions.

The change comes after the federal government missed its stated small business contracting goal (23 percent of total procurement across all agencies) for the eleventh straight year in 2012. Though lawmakers stopped short of imposing penalties like reducing budgets or senior level compensation for agencies that fall short of the annual goals, as had been previously proposed in both chambers, this is the first time they have provided formal incentives to encourage agencies to deliver on their annual pledge to small businesses.

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Deadline to comment nears as major changes to US DOT’s DBE program loom

December 19, 2012 by

There is a federal Notice of Proposed Rulemaking (NPRM) pending that could spell major changes in the way the U.S. Department of Transportation administers its disadvantaged business enterprise (DBE) program.  DBE requirements are a part of all contracting performed by the nation’s airports, state highway departments, and transit systems.

Some predict that if the new rules go into effect as currently proposed, DBEs will see a decrease in contract opportunities and an increase in the burden on DBE-certified firms.

The deadline for comments to the USDOT proposed rule was originally November 5, 2012, but was extended to 11:59pm on December 24, 2012.  The NPRM can be found at,0#!docketDetail;D=DOT-OST-2012-0147;dct=FR%2BPR%2BN%2BO%2BSR.

DBE firms and businesses who could potentially benefit from DBE contracting are being urged by several advocacy groups to submit comments by the deadline.  Contractor trade associations already have been active in submitting comments, pro and con.

The following is a summary of the most significant proposed changes:

Rebuttal of Economic Disadvantage: The most noteworthy proposed revision is USDOT’s desire to broaden the areas which automatically rebut a presumption of disadvantage.  Currently, a Personal Net Worth (“PNW”) exceeding $1.32 million automatically rebuts the presumption of economic disadvantage, but a local Office of Minority and Women Business Enterprises (an OMWBE operated by an airport, highway department or transit system) may rebut the presumption if it has a “reasonable basis to believe the individual is not socially or economically disadvantaged.”  USDOT proposes including, as part of that rule, a second statement taken from USDOT’s guidance (which is currently not an official mandate):

  • If the person demonstrates an ability to accumulate substantial wealth, has unlimited growth potential, or has not experienced or has not had to overcome impediments to obtaining access to financing, markets, and resources, the individual’s presumption of economic disadvantage is rebutted, even if it individual’s PNW is less than $1.32 million.

USDOT states that with this language, it is appropriate for recipients (certifying agencies such as OMWBE) to review the total fair market value of the individual’s assets and determine if that level appears to be “substantial” and indicates an ability to accumulate substantial wealth.  The purported purpose of this provision is to give recipients a tool to exclude an individual who, in overall asset terms, is what a reasonable person would consider to be a wealthy individual, even if their liabilities bring their PNW below the $1.32 million cap.  Notably, USDOT also seeks comment as to whether a more “bright-line” approach would be preferable, such as saying that someone whose Adjusted Gross Income on his or her Federal income tax return was over $1 million for two or three years in a row would lose the presumption of economic disadvantage, regardless of PNW.

New Personal Net Worth Form: USDOT proposes a newly designed PNW statement required of all applicants.  The new form would include all assets owned by the individual, including ownership interests, personal assets, and the value of the personal residence.    USDOT also seeks comment on whether the spouse of an applicant owner should have to file a PNW statement.

Transfers:  USDOT proposes to directly add a paragraph into the regulation restating the requirement that assets transferred to an immediate family member for less than fair market value within the last two years can be counted toward an individual’s PNW calculation.  USDOT also proposes that transfers from business owners to the companies be counted toward the owner’s PNW to avoid artificially depressing that owner’s PNW.

Certification Related Provisions:  USDOT also proposes several changes to how ownership and control are determined.  Specifically, the rule will require applicants to submit additional proof as to the sufficiency of their initial capital contribution and the circumstances of any funding streams to the firm since its inception, including collateral value, proof of asset ownership, and more stringent guidelines relating to deposits made by the applicant.

Good Faith Efforts:  USDOT adds some clarification for establishing Good Faith Efforts to meet the DBE goal.  USDOT states that prime contractor bidders whose bid includes a promise to include DBEs after the contract awarded is not to be considered as a good faith effort. USDOT proposes that bidders would have two options: (1) bidders may submit Good Faith Effort documentation along with original bids, or (2) Bidders may submit good faith documentation within one day of being notified of their winning bid.

Counting Trucking Operations:  USDOT proposes to revise the current requirements for how much of a DBE trucking company’s involvement can be counted towards a DBE goal. The proposal would give credit to a DBE that leases trucks from non-DBE entities but uses its own employees as drivers.  This change is already implemented in many states.

There are several ways to submit comments on these proposed rule changes.  The easiest way is to simply file comments online at the web site.   Go to and then type in docket number OST–2012–0147.   This will connect you to a web page where you can type-in and/or upload your comments. Be sure to include the docket number in any submission you make.

Please note that all comments, including any personal information you provide, will become part of the docket and will be publicly posted without change at