SBA announces new HUBZone designations effective Jan. 1, 2015

January 5, 2015 by

The Small Business Administration (SBA) has announced changes to the geographic HUBZone designations, effective January 1, 2015.

The SBA says the changes reflect several new data sources. These data sources include:

  • American Community Survey 2009-2013 five year estimates,
  • 2013 OMB metropolitan area delineations, and
  • 2015 lists of Difficult Development Areas and Qualified Census Tracts, released by HUD in October 2014.

The changes reflect:

  • eight newly qualified counties,
  • 47 counties that have been re-designated until January 2018,
  • 1,479 newly qualified census tracts, and
  • 1,319 census tracts that have been re-designated until January 2018.

All current HUBZone designated areas can be found by downloading this document: HUBZone Designations – effective 01.01.2015

Please note that these new changes have not been incorporated into SBA’s interactive HUBZone map yet.  SBA says it will make another announcement about revisions to the map when it is updated.

For more information about the HUBZone program, please see: https://www.sba.gov/content/understanding-hubzone-program

Construction company to pay $2.15 million, admits abuse of DC’s certified business enterprise program

December 30, 2014 by

Forrester Construction Company has agreed to pay $2.15 million to the United States and implement internal reforms to resolve a criminal investigation into alleged fraud committed by the company in connection with the use of Certified Business Enterprises (CBEs) in the procurement of more than $145 million in District of Columbia government contracts. The internal reforms will be subject to independent review and reporting.

As part of the resolution, Forrester Construction admitted that it improperly entered into written letter agreements and “Action of Management Committee” memoranda with the CBE participants to joint ventures that were not disclosed to the District of Columbia during the contract procurement process. As a result, the company admitted, both Forrester Construction and the CBE partners failed to follow the required CBE rules and regulations.

The announcement concludes a two-year investigation into Forrester Construction, a firm based in Rockville, Md., as well as its CBE partners on the joint venture projects.

Under the terms of a non-prosecution agreement reached with the U.S. Attorney’s Office for the District of Columbia, Forrester Construction agreed to pay $2.15 million to the United States and accepted and acknowledged responsibility for its improper conduct, as described in a Statement of Facts. The company also agreed to undertake various remedial measures to ensure compliance with the requirements of the District of Columbia’s CBE program (or any such equivalent on federal government projects) and the U.S. Small Business Administration’s 8(a) program, insofar as the company undertakes projects involving CBEs or 8(a) companies in the future.

Both the District of Columbia’s CBE program and SBA’s 8(a) program are meant to help small, disadvantaged businesses access government procurement markets.

The remedial measures include the hiring or designation of a CBE and 8(a) Compliance Officer, as well as an Ethics Officer; the implementation of a comprehensive training program for all company personnel regarding compliance with the CBE and 8(a) programs; maintaining an effective compliance and ethics program, and continuing cooperation with law enforcement. Significantly, individual employees directly associated with the inappropriate conduct are no longer employed by the company.

Additionally, the company agreed to undertake community service intended to develop improvements in the CBE and 8(a) programs going forward. Forrester Construction agreed to offer workshops, either individually or in collaboration with an industry trade association, aimed at providing training with respect to the rules and regulations of the CBE and 8(a) programs, among other topics relating to the construction industry.

This case is the latest example of law enforcement efforts to protect the integrity of CBE programs. Michael A. Brown, a former member of the Council of the District of Columbia, pled guilty in 2013 to a federal bribery charge stemming from an undercover investigation in which he accepted $55,000 from FBI agents posing as employees of a company that purportedly wanted CBE approval and contracting opportunities. Brown is serving a 39-month prison term.

“By changing the terms of joint ventures with small disadvantaged businesses and not reporting them to the D.C. government, Forrester Construction circumvented the foundation of the CBE program and used their proceeds to increase their own bottom line,” said Assistant Director in Charge McCabe.

“These joint ventures principally served the interests of Forrester Construction Company to make money and to obtain contracting opportunities otherwise unavailable to them,” said SBA Inspector General Gustafson. “Joint ventures involving SBA program participants should be structured and executed to give the small business an opportunity to gain experience and technical knowledge and to further develop their business. I want to thank the U.S. Attorney’s Office for its leadership in reaching this agreement.”

According to the Statement of Facts agreed to by the company, between 2008 and 2009, Forrester Construction formed multiple joint ventures with CBEs for the purpose of bidding on construction contracts in the District of Columbia.

Three joint ventures formed by Forrester Construction and one of the CBEs, EEC of D.C., Inc., were awarded construction contracts from the District of Columbia. These contracts, including change order amounts, totaled approximately $64 million for construction of a new headquarters building for the Department of Employment Services; approximately $5.4 million for construction of a Senior Wellness Center in Ward 1, and approximately $56 million for the renovation and modernization of the existing Anacostia Senior High School building.

Forrester Construction also formed joint ventures with another CBE, and those joint ventures were also awarded construction contracts from the District of Columbia, which were, over a period of approximately three years, in an aggregated amount in excess of $20 million.

In each of these various projects, the joint venture formed by Forrester Construction and the respective CBE partner received the maximum amount of contracting preferences for which the CBE partner was eligible, which provided Forrester Construction and the respective CBE partner with a competitive advantage during the bidding process.

As part of its joint venture submissions to the District of Columbia Department of Small and Local Business Development (DSLBD), Forrester Construction and its respective CBE partner represented that the CBE partner would be the majority partner and maintain a 51% interest in the joint venture, entitling the CBE partner to 51% of the net operating profits of the joint venture. Each joint venture agreement also established a “Management Committee,” consisting of two representatives from the CBE partner and one representative from Forrester Construction, which provided the CBE partner with majority control of the joint venture.

After each joint venture for the projects was submitted to, and certified by, the DSLBD, however, Forrester Construction and the respective CBE partner signed a memorandum entitled “Action of Management Committee” or signed a letter agreement, which related to the operations of each joint venture. The memoranda and/or letter agreements effectively increased Forrester Construction’s control over the day-to-day operations of the projects and reduced the CBE partner’s share of the profits or losses in the projects—notwithstanding the requirements of the joint venture agreements and the CBE rules and regulations. Forrester Construction and the CBE partner did not disclose these “Action of Management Committee” memoranda or the letter agreements to the District of Columbia government during the procurement process.

The “Action of Management Committee” memoranda also revised the respective scope of work and services that Forrester Construction and the CBE partner would provide to certain of the projects. In each instance, the “Action of Management Committee” memorandum applicable to the particular project identified a small scope of work for the CBE partner to complete and provided that Forrester Construction would provide all remaining general conditions, subcontract work, and all other work required to fulfill the requirements of the project.

For example, with respect to the Anacostia Senior High School joint venture, the applicable “Action of Management Committee” memorandum provided that the scope of work for the CBE equated to approximately $2.75 million, while the scope of work for Forrester Construction equated to approximately $46 million. The “Action of Management Committee” memoranda also established a pre-determined profit for the joint venture that specifically excluded any profits earned or losses sustained by either Forrester Construction or the CBE partner for their respective scope of work. Moreover, Forrester Construction and the CBE partner agreed that only the pre-determined profit, exclusive of each partner’s individual “scope of work,” would be split in the proportions agreed to in the joint venture agreement (i.e., 51% for the CBE partner and 49% for Forrester Construction). All other profits or losses generated through an individual scope of work would belong to the respective entity.

All of the work was performed under the various contracts. However, as a result of the letter agreements and “Action of Management Committee” memoranda, the CBE participant for each of the projects did not maintain majority control of the projects and did not receive 51% of the profits or losses associated with the projects, as required by the joint venture agreements and in accordance with the CBE rules and regulations.

This investigation was conducted by the FBI’s Washington Field Office; the Criminal Investigation Unit of the U.S. Attorney’s Office for the District of Columbia; the District of Columbia’s Office of the Inspector General, and the SBA Office of Inspector General.

Source: http://www.fbi.gov/washingtondc/press-releases/2014/forrester-construction-company-agrees-to-pay-2.15-million-admits-abuse-of-certified-business-enterprise-program

DHS seeks help of small businesses to develop security-related solutions

December 19, 2014 by

The Homeland Security Department’s research and development arm recently released a pre-solicitation notice to small businesses regarding the potential development of innovative technologies from forensics to cybersecurity to wearable communications.

DHS logoThe Science and Technology Directorate released the joint pre-solicitation with the Domestic Nuclear Detection Office, or DNDO, which is also part of DHS, through its Small Business Innovation Research, or SBIR, program. It focuses on nine areas, including seven for S&T and two for DNDO.

The program began accepting proposals starting Dec. 18, according to FedBizOpps.

“While we want to stimulate innovation to meet the needs of the homeland security enterprise by having offerers submit proposals that concentrate on proving the scientific and technical feasibility of their ideas, they must consider the commercialization potential of their proposed effort,” Lisa Sobolewski, S&T’s SBIR program director, said in a statement.

Keep reading this article at: http://www.fiercehomelandsecurity.com/story/dhs-seeks-help-small-businesses-develop-security-related-solutions/2014-12-11

Inspector general releases report on critical risks facing the SBA

December 12, 2014 by

The Office of Inspector General of the U.S. Small Business Administration (SBA) has issued its semi-annual report focusing on the most critical risks facing the SBA, including several aspects of government procurement.

SBA - IGCovering the period April through September 2014, the OIG’s report covers key SBA programs and operations, including financial assistance, government contracting and business development, financial management and information technology, disaster assistance, management challenges, and security operations.

Of particular interest to the government contracting community are findings such as:

  • Over $400 million in federal contracts 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.
  • The owner of a Colorado real estate firm and 5 family members were charged in a 37-count indictment by a state grand jury in connection with a $2,323,000 SBA-guaranteed loan to refinance an office building and other existing debt.
  • Sixteen cases of contract-related bribery and/or fraud were identified in connection with contracts or subcontracts set-aside for 8(a), HUBZone, veterans, or other categories of small business.
  • The OIG was unable to determine if the SBA appropriately issued waivers to the non-manufacturer rule because of a lack of established procedures, missing files, and other deficiencies.

The OIG’s full report can be downloaded here: SBA OIG Semi-Annual Report to Congress – Fall 2014

Report: small biz panel manipulated by trade associations

November 21, 2014 by

The government panel that reviews federal rules and how they affect small businesses is manipulated by trade associations, a Nov. 12 Center for Effective Government report says.

Three federal agencies – the Environmental Protection Agency, the Labor Department’s Occupational Safety and Health Administration and the Consumer Financial Protection Bureau – are required to convene a small business review panel any time the govenrment plans to issue a rule that could have a significant economic impact on small businesses.

But the report says trade associations have too much power over the panel. Trade associations are supposed to identify small business representatives to advise the panel, participate in meetings and even help write their comments, the report says.

Keep reading this article at: http://www.fiercegovernment.com/story/report-small-biz-panel-manipulated-trade-associations/2014-11-13

Open house and industry day to be held by Fort Benning on Dec. 17

November 18, 2014 by

Fort Benning, Georgia, is hosting a dual-purpose event on Wednesday, Dec. 17, 2014, that should be of keen interest to businesses interested in doing businesses with this military installation.

Benning’s Mission and Installation Contracting Command (MICC) is holding a Small Business Forecast Open House in the morning.  This will be followed by a separate afternoon Maneuver Center of Excellence (MCoE) Industry Day.

At the morning event MICC officials will present their anticipated forecast on various opportunities for 2015.  The afternoon session will provide industry with an update on acquisition planning for the future procurement of MCoE Infantry/Armor School services.

Here is the day’s outline:

Date: Wednesday, December 17, 2014

Times:

  • Forecast Open House – 9:00am to 11:30pm
  • MCoE Industry Day – 1:00pm to 3:30pm

Event Sign-Ins: 30 minutes prior to each event

Location: McGinnis-Wickham Hall, Room E106, 1 Karker Street (Building 4), Fort Benning, GA 31905

There is no fee to attend, but ADVANCE REGISTRATION IS REQUIRED!

To reserve your seat, please respond to this notice by one of the three registration options listed on the attached Registration Form. One form per attendee please!

The Point of Contact (POC) for this event is Mr. Stephen Magner, Small Business Specialist and small business advocate for MICC Fort Benning, Georgia.  Mr. Magner can be reached at
706-545-2274 or email at lim.liamnull@vic.rengam.a.nehpets.

A map of the area can be downloaded by clicking here.

 

VA plans national conference in Atlanta on Dec. 9 thru 11

November 18, 2014 by

The Department of Veterans Affairs (VA) is holding its 2014 National Veterans Small Business Engagement (NVSBE) conference on December 9-11, 2014 in Atlanta.

The VA conference is designed to help small businesses — especially veteran owned and service-disabled veteran owned small businesses (VOSBs and SDVOSBs) — expand contacts and build partnerships to maximize opportunities in the Federal and commercial marketplace.

This event connects small businesses with government and commercial procurement decision makers (PDMs) interested in working with VOSBs. In addition, the VA is planning to expand the attendance of commercial customers looking for VOSBs, and match Federal requirements with VOSB capabilities.

Businesses attending this event can expect to:

  • Engage with PDMs from Federal and commercial customers to build relationships to enhance your chances of winning procurement contracts.
  • Learn about Federal and commercial opportunities specific to your industry at Business Requirement Sessions led by PDMs.
  • Take part in Networking Roundtables to personally demonstrate and pitch your business capabilities to PDMs from Federal agencies and commercial customers.
  • Network with other businesses to discover subcontracting and teaming opportunities.
  • Attend learning sessions highlighting business-building topics such as:
    • Competitive Strategies for Winning Federal Business
    • Building Strong Corporate Relationships
    • Marketing Your Small Business Capabilities

When registering for the event, attendees will be asked to answer the following two questions which will help conference organizers arrange for participation by the right contracting officers and program managers:

  • Who are you most interested in meeting at NVSBE? (Please provide name, title, and organization.)
  • What learning sessions would you like us to provide?

Registration begins September 1, 2014.  For more information about NVSBE, visit www.nvsbe.com.

Feel free to email your feedback and questions to vog.avnull@EBSVN.

An interview with the Pentagon’s small-business director

November 14, 2014 by

Andre Gudger has heard the argument many times that, as he puts it, “small businesses don’t build planes and ships and nuclear weapons.”

It’s his job — or at least part of it — to change that perception.

A Maryland native, Gudger has been the director of the Defense Department’s Office of Small Business Programs since 2011. During the three years prior to his arrival, the share of the agency’s contracts awarded to small companies had shrunk every year. Moreover, in the more than three decades since federal small-business contracting goals had been put in place, the agency had never once accomplished them.

In the three years since, even amid budgetary constraints, small-business participation in Defense Department projects has expanded each year. In fact, this past year, the agency for the first time eclipsed not only its small-business goal, but also the federal government’s target, awarding roughly 23.4 percent of defense contracting dollars, representing about $53 billion, to small employers.

Keep reading this article at: http://www.washingtonpost.com/business/on-small-business/operation-small-business-an-interview-with-the-pentagons-small-business-director/2014/10/23/216d4cc8-5a12-11e4-b812-38518ae74c67_story.html

 

IG reports continued weaknesses in small business reporting and 8(a) program

November 13, 2014 by

The Office of the Inspector General (IG) of the U.S. Small Business Administration reports on 11 weaknesses in a range of SBA programs.  Two of the “challenges” identified in the Oct. 17, 2014 report pertain directly to small business participation in federal contracting:

  • Procurement flaws allow large firms to obtain small business awards, and allow agencies to count contracts performed by large firms towards their small business goals.
  • The SBA needs to modify the Section 8(a) Business Development  Program so more firms receive business development assistance, standards for  determining economic disadvantage are justifiable, and the SBA ensures that firms follow 8(a) regulations when completing contracts.

SBA - IGThe IG’s full document, entitled “Report on the Most Serious Management and Performance Challenges Facing the Small Business Administration In Fiscal Year 2015″ can be downloaded here, but the text of the IG’s finding on the two point just cited appears below.

Procurement Reporting

The Small Business Act established a Government-wide goal that 23 percent of the total value of all prime contracts be awarded to small businesses each fiscal year. As the advocate for small business, the SBA should strive to ensure that only small firms obtain and perform small business awards. Further, the SBA should ensure that procuring agencies accurately report contracts awarded to small businesses when representing their progress in meeting small business contracting goals.

In September 2014, we issued a report that identified over $400 million in FY 2013 contract actions that may
have been awarded to ineligible firms. We also identified over $1.5 billion dollars in contract actions for
which the firms were in the 8(a) or HUBZone programs at the time of contract award, but were no longer in
these programs in FY 2013. Previous OIG audits and other Government studies have shown widespread
misreporting by procuring agencies, since many contract awards that were reported as having gone to small
firms have actually been performed by larger companies. While some contractors may misrepresent or
erroneously calculate their size, most of the incorrect reporting results from errors made by Government
contracting personnel, including misapplication of small business contracting rules. In addition, contracting
officers do not always review the on-line certifications that contractors enter into Government databases
prior to awarding contracts. The SBA should ensure that procuring agencies accurately report contracts
awarded to small businesses when representing their progress in meeting small business contracting goals,
and that contracting personnel are reviewing on-line certifications prior to awarding contracts.

The SBA revised its regulations to require firms to meet the size standard for each specific order to address a
loophole within General Services Administration Multiple Awards Schedule (MAS) contracts, which contain
multiple industrial codes that determine the size of the company. Previously, a company awarded an MAS
contract could identify itself as a small business on individual task orders awarded under that contract, even
though it did not meet the size criteria for the applicable task. Thus, agencies received small business credit
for using a firm classified as small, when the firm was not small for specific orders under the MAS contract. In
addition, the SBA submitted a final rule to the Federal Acquisition Regulations (FAR) Council to implement the
changes made to its regulations in the FAR. The SBA also updated its standard operating procedure (SOP) to
ensure consistency in conducting its surveillance reviews to assess Federal agencies’ management of their
small business programs and compliance with regulations and applicable procedures.

While the SBA has made substantial progress on this challenge, we are working with the Agency to verify that
the surveillance reviews were conducted in a thorough and consistent manner.

                                                                                               ***

8(a) Program

The SBA’s 8(a) Business Development (BD) Program was created to assist eligible small disadvantaged
business concerns to compete in the American economy through business development. Previously, the
SBA did not place adequate emphasis on business development to enhance the ability of 8(a) firms to
compete, and did not adequately ensure that only 8(a) firms with economically disadvantaged owners in
need of business development remained in the program. Companies that were “business successes”
were allowed to remain in the program and continue to receive 8(a) contracts, causing fewer companies
to receive most of the 8(a) contract dollars and many to receive none.

The SBA has made progress towards addressing issues that hinder its ability to deliver an effective 8(a)
BD Program. For example, the SBA expanded its ability to provide assistance to program participants
through its resource partners—small business development centers, service corps of retired executives,
and procurement technical assistance centers. In addition, the SBA has taken steps to ensure business
opportunity specialists assess program participants’ business development needs during site visits. The
SBA also revised its regulations, effective March 2011, to ensure that companies deemed “business
successes” graduate from the program. These regulations also establish additional standards to address
the definition of “economic disadvantage.” Agency officials stated that the rule-making process served
as an adequate proxy to objectively and reasonably determine effective measures for economic
disadvantage, and were not aware of any reliable sources of data to determine economic disadvantage.

However, for the second consecutive year, the SBA has not completed updating its SOP for the 8(a) BD
Program to reflect the March 2011 regulatory changes. In addition, we continue to maintain that the
SBA’s standards for determining economic disadvantage are not justified or objective based on the
absence of economic analysis. In December 2011, the SBA awarded a contract to develop and deploy a
new IT system by December 2012 to assist the SBA in monitoring 8(a) program participants. However,
the new system has not been deployed, and its delivery date and capabilities are undetermined at this
time.

Fort Gordon schedules vendor open house on Dec. 2

November 12, 2014 by

The Army Contracting Command Office at Fort Gordon is inviting vendors to participate in its open house scheduled for Tuesday, Dec. 2, 2014.

Acquisition forecast details for 2015 will be presented.

Event details are as follows:

Date: December 02, 2014
Time: 8:00 to 11:30 a.m.
Check-In: 7:30 to 8:00 am
Place: Alexander Hall, Building 29805. Fort Gordon, GA 30905

Advance registration is required.  Instructions for registering appear on the flyer located here.