An interview with the Pentagon’s small-business director

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

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

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.

SBA’s 8(a) and HUBZone eligibility workshop to be held in Atlanta on Nov. 12

The Georgia District Office of the Small Business Administration (SBA) is conducting a workshop on Wednesday, Nov. 12, 2014 for small businesses interested in learning about the eligibility requirements associated with the SBA’s 8(a) Business Development and Historically Underutilized Business Zone (HUBZone) programs.

The workshop will be held at 233 Peachtree St. NE, Ste. 1900, Harris Tower, Peachtree Center Mall, Atlanta, GA, 30303, from 10:00am until noon.

In order to attend, pre-registration is required.  To register, click on this link: http://events.sba.gov/eventmanagement/EventRegistration.aspx?id=838a3859-3c5d-e311-9914-02bfa56e2a24.

GSA says small businesses benefitting from reverse auctions

Taxpayers and small businesses are benefitting from the ReverseAuctions program, the General Services Administration said.

In fiscal 2014, 85 percent of auctions awarded through the initiative went to small businesses even though 60 percent was set aside for them, and overall, reverse auctions generated 23 percent savings off standard contract price, an Oct. 21 blog post says.

Those small-business procurements totaled more than $19 million.

Additionally, more than 21 government agencies created 900 auctions and saved more than $6 million, according to the blog.

“Competition fuels savings. GSA ReverseAuction’s fiscal year 2014 performance is a testament to this principle,” wrote Charles Wingate, chief of a branch of the agency’s Federal Acquisitions Services’ Information Technology Commodities Division, on the blog.

ReverseAuctions is an online tool for agencies to use at no additional cost to buy simple commodities and services.

Keep reading this article at: http://www.fiercegovernment.com/story/gsa-small-businesses-benefitting-reverse-auctions/2014-10-22

Top federal contracting vehicles offer highest value in five years

The top 20 federal opportunities for the 2015 federal fiscal year offer $220.3 billion in total contract value, representing the highest value of the past five fiscal years; a continued increase from a low of $92.2 billion in fiscal 2013; and a $59.6 billion increase over the top 20 combined contract value of $160.7 billion in fiscal 2014.

Information Technology opportunities total $161.5 billion, representing 73 percent of the top 20 total contract value, a shift from last year when professional services opportunities dominated.

Driving the increase in IT value are several large follow-on contract programs expected to be solicited this year. Follow-on opportunities account for 99 percent of the value in the top 20 opportunities.

The split between this year’s defense and civilian top 20 opportunities is the most even of the past five years — essentially 50/50, with near-even values and 10 opportunities each.

Keep reading this article at: http://www.washingtonpost.com/business/capitalbusiness/deltek-top-federal-contracting-vehicles-offer-highest-value-in-five-years/2014/10/17/59d03918-53dc-11e4-809b-8cc0a295c773_story.html

Huge bidder pile-on for VA’s $22.3 billion tech deal

The number of companies that have expressed interest in bidding on the Department of Veterans Affairs’ Twenty-One Total Technology Next Generation contract — known as T4NG — hit 635 vendors Tuesday, according to a VA spreadsheet.

The list of interested bidders ranges alphabetically from A1C Partners LLC to Yakshna Solutions and is dominated by small-business hopefuls. VA plans to award up to 20 indefinite-delivery, indefinite-quantity contracts.

Keep reading this article at: http://www.nextgov.com/defense/whats-brewin/2014/10/huge-bidder-pile-vas-223-billion-tech-deal/96653

SBA data show large firms are nabbing contracts reserved for small businesses

Federal procurement data show that large companies, including leading defense contractors, last year received millions of dollars in contracts intended for small and disadvantaged businesses. The data was obtained last week by the American Small Business League, which fought a multi-year court battle to obtain the information from the Small Business Administration.

The group, based in Petaluma, Calif., and run by software entrepreneur Lloyd Chapman, has been a thorn in the side of SBA for years. It accuses the agency of catering to large companies that misrepresent themselves as small businesses to win government contracts.

Last week the league obtained from SBA an Excel file containing nearly 107,000 entries of vendors that received $83 billion in small business contracts in fiscal 2013. While SBA annually releases analytical information about small business contracting, it took a lawsuit from the league to force the agency to release its list of vendors who receive small business contracts.

Keep reading this article at: http://www.govexec.com/contracting/2014/10/sba-data-show-large-firms-are-nabbing-contracts-reserved-small-businesses/95699/

SBA zeros out fees on small dollar loans, expands relief for larger loans to vets

The U.S Small Business Administration (SBA) has announced that fee relief on 7(a) loans of $150,000 or less implemented last year and originally slated to expire on Sept. 30, 2014, will be extended through federal fiscal year 2015.   SBA has also announced that fee relief measures for SBA Veterans Advantage will also be renewed as well as enhanced.   Both the extension of the fee relief for 7(a) loans $150,000 and under, and the extension and enhancement of the fee relief for SBA Veterans Advantage loans became effective October 1, 2014, and will remain in effect through Sept. 30, 2015.

sba-logo“We zeroed out fees on loans of less than $150,000 to any 7(a) borrower because we don’t want SBA fees to be an impediment to getting capital out to communities where it can make a game-changing difference, especially to our under-served communities, who use these small dollar loans more frequently,” said SBA Administrator Maria Contreras-Sweet. “We also owe a debt of gratitude and so much more to our service men and women, and veterans who are the cornerstone of small business ownership. This fee relief will continue to help veterans business owners who grow their businesses, create jobs in their communities, and put their training and passion for our country to work in their neighborhoods.”

The most recent numbers available for FY14, as of September 12, 2014, show that the SBA had guaranteed 28,806 for over $1.74 billion in loans $150,000 and under, up from 23,337 loans and $1.34 billion in FY 2013.  This represents an increase of 23.4 percent and 30 percent, respectively. Fee reductions on these loans resulted in almost $19 million in savings to small business borrowers in FY 2013.

Under the original fee relief for 7(a) loans that began  Oct 1, 2013, both the upfront guaranty fee and the annual servicing fee (“on-going guaranty fee”) were reduced to zero on loans $150,000 and under.

Today, the SBA is announcing that:

  • The provisions that began on Oct. 1, 2013, for 7(a) loans under $150,000, will now be continued for fiscal year 2015. For loans larger than $150,000, the annual servicing fee lenders pay will be 0.519 percent of the guaranteed portion of the outstanding balance of the loan. The upfront guarantee fee will continue to depend on both the amount and the maturity of the loan.
  • For SBA Veterans Advantage loans, the conditions implemented on Jan. 1, 2014 – zero upfront guaranty fee on all SBA Express loans to veterans of $150,000 up to $350,000 – will remain unchanged for FY 2015.
  • Beginning Oct. 1, 2014, the upfront guaranty fee for non “SBA Express” loans $150,000 up to $5 million will now be reduced by 50 percent. There is no reduction on the annual servicing fee for loans over $150,000.

Seventy percent of all SBA loans made to veterans are $350,000 or less. Since its inception through Sept. 20, 2014, SBA had guaranteed 153 loans for $38,861,900 under Veterans Advantage. Fee relief for these loans resulted in savings to borrowers of about $571,000.

For further information on all SBA programs and services, visit the SBA website at www.sba.gov, or contact your local SBA field office.  You can find contact information for your local SBA office at http://www.sba.gov/localresources/index.html.

Marketing to GSA is theme of Nov. 3rd webinar

The General Services Administration (GSA) is sponsoring a free webinar on Nov. 3, 2014 for current and potential contractors who are looking for suggestion for improving their marketing techniques.  The one-hour webinar will begin at 1:00 pm Eastern.

GSA recommends reading the “Doing Business with GSA” publication (http://www.gsa.gov/portal/content/169023) and EO 13514 “Federal Leadership in Environmental, Energy, and Economic Performance” (https://www.fedcenter.gov/programs/eo13514/)  prior to taking this training.

To register to attend this webinar, go to: https://www2.gotomeeting.com/register/332011274.

Once registered, you will receive an email confirming your registration with information you need to join the webinar.