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The 3 things every small business contractor should know

November 18, 2015 By Nancy Cleveland

Often overshadowed by their larger, multibillion dollar prime counterparts, small business contractors are critical to the federal procurement community. With billions awarded in set-asides each year, small business has become big business for eager capture executives looking to identify new opportunities.

Small Business Set AsidesOn Nov. 10, 2015 Bloomberg Government hosted a webinar analyzing the importance of small business set-asides. The presentation discussed recent set-aside spending at civilian and defense agencies and how a growing share of small-business obligations are being awarded via set-asides.

No time to watch the replay?  No problem.  We’ve pulled together the top three things every small business contractor should know.

keep reading this article at: http://about.bgov.com/blog/the-3-things-every-small-business-contractor-should-know/

Filed Under: Contracting Tips Tagged With: Alaskan Native, ANC, federal contracting, graduation, multiple award contract, set-aside, small business

Do Alaska Native Corporations deserve their special contracting status?

November 14, 2011 By ei2admin

For many people, the government’s set-aside program for Alaska Native Corporations is a blemish on the federal acquisition system. Even people who otherwise support the idea of setting aside contracts for economically disadvantaged groups take a dim view of the program, which allows agencies to award contracts of any size to ANC firms without competition.

Ever since the death of its champion, Alaska Sen. Ted Stevens, opponents have called for the program to end. Here is an overview of the arguments for and against keeping it.

The case for the ANC program:

* It’s a time-saver. Agencies can award sole-source contracts of any size to ANCs at any time. Therefore, the ANC program lets contracting officers move quickly when they’re pressured for time or caught in emergency situations, such as preparing for a hurricane.

The contracting officer doesn’t have to spend time justifying a sole-source award when using an ANC, said Larry Allen, president of Allen Federal Business Partners.

Officials also save time by avoiding the bid protests that are always a risk during full-and-open competitions.

* It stimulates the economy. The program benefits Alaska natives in economically depressed areas in the state and other parts of the country.

A 2009 survey of 11 ANCs by the Native American Contractors Association (NACA) showed that the companies provided more than $530 million in various types of benefits to more than 67,000 shareholders from 2000 to 2008. More than $341 million of that money was in cash dividends.

Alaska natives are given the opportunity to go to college, for instance, with their shares in the ANCs, said Jennine Elias, director of external affairs at NACA.

The program also provides funding for housing and government services, such as law enforcement.

* It’s a promise-keeper. ANCs were created to settle land claims with Alaska natives and foster economic development, and the companies have been allowed to participate in the government’s 8(a) minority-owned small-business program since 1986. Therefore, the ANC program fulfills a promise to the native community, Elias said.

The case against the ANC program:

* It short-circuits the procurement process. Although sole-source provisions can help in emergencies, the process can tempt an official to award a contract when it would be better to hold a competition for the work, Allen said.

There’s no doubt that contracting officers are overworked, and the ANC program can help ease their workload. But, he cautioned, “a program with good intentions can get out of control.”

* It undermines efforts to level the playing field. There was a big push for parity in government several years ago. Companies in Historically Underutilized Business Zones used to have first crack at set-aside contracts, but Congress put all small businesses on an equal footing last year.

“The theme is parity among other guys,” said Rob Burton, former deputy administrator at the Office of Federal Procurement Policy and now a partner at Venable law firm. But because ANCs don’t have to follow the same rules as other small businesses, they have “an incredible deal.”

Other small-business owners and Federal Computer Week readers have voiced their frustrations.

“The ANC advantage is unfair to real 8(a) companies and should be disbanded,” commented one reader from Virginia.

* Its benefits to the native community are questionable. The benefits ANC shareholders receive have come under scrutiny over the years. Sen. Claire McCaskill (D-Mo.), chairwoman of the Homeland Security and Governmental Affairs Committee’s Contracting Oversight Subcommittee, has found some problems with the program.

In 2009, her subcommittee’s analysis revealed that only about $615 a year in money, scholarships and other benefits go to each member of the Alaska native community. The report also says the ANCs employ a relatively small percentage of shareholders and often send work to outside subcontractors. McCaskill has proposed changes to match other small-business rules.

However, Elias said ANCs are already required to report on what they’re doing in their community in the interests of transparency.

And Allen said it’s a good program that would benefit from oversight by every agency, not just the Small Business Administration.

About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Washington Technology. Published Nov. 8, 2011 at http://washingtontechnology.com/articles/2011/11/07/home-page-acquisition-pros-cons-anc.aspx?s=wtdaily_091111.

Filed Under: Contracting News Tagged With: Alaskan Native, ANC, HUBZone, OFPP, SBA, small business, sole-source

Small businesses share in SEWP sales

August 1, 2011 By ei2admin

The portion of sales going to small businesses in the Solutions for Enterprise-Wide Procurement (SEWP) IV reached 42 percent last year, an increase of 7 percent from the previous year, according to SEWP IV officials.

“The NASA SEWP program office has always promoted the use of small businesses,” said Joanne Woytek, SEWP IV program manager. “Two of our four contract groups are forms of small business set-asides, which all agencies can utilize to help meet their small business goals.”

• 42 percent of SEWP IV spending goes through SEWP’s small businesses.
• 7.2 percent of SEWP IV spending goes through SEWP’s Service-Disabled Veteran-Owned Small Businesses (SDVOSB).

[Download a .pdf version of this special report at http://download.1105media.com/GIG/Custom/2011PDFS/SEWP2011.pdf.]

SEWP IV has 38 contract holders, including 21 small businesses. Of the 21 small businesses, six are 8(a) small, disadvantaged businesses and 10 are veteran-owned small businesses, including seven service-disabled veteran-owned small businesses (SDVOSBs). SEWP IV has set-aside authority for small business task orders and SDVOSB task orders. Last year, SEWP IV sales going to SDVOSBs reached 7.2 percent, up from 6 percent the previous year.

SEWP IV’s pool of small businesses also includes woman-owned businesses, Alaska Native businesses, and businesses in historically underutilized business (HUB) zones. Agencies can hold competitions among all small businesses, but then give preference to these other sub-categories in addition to the 8(a) companies.

— from Washington Technology, 7/29/2011 at http://washingtontechnology.com/microsites/2011/sewp2011/07-sewp-iv-small-business-utilization.aspx

Filed Under: Contracting News Tagged With: 8(a), ANC, HUBZone, NASA, SDVOSB, SEWP, small business

SBA makes first major revision to 8(a) program in a decade

February 15, 2011 By ei2admin

The Small Business Administration has finalized the most comprehensive changes to its 8(a) small and disadvantaged business contacting program in more than a decade, with a sharp focus on reforming and improving the transparency of Alaska native corporations.

The long-awaited final rules, published Friday in the Federal Register, closely mirror — except for minor technical changes — the proposed rules offered by SBA in October 2009.

The lengthy final rule, which takes effect on March 14, attempts to tackle a host of 8(a) concerns, from the threshold to enter and remain in the program to tightening the rules for joint ventures and mentor-protégé relationships.

“SBA has learned through experience that certain of its rules governing the 8(a) [Business Development] program are too restrictive and serve to unduly preclude firms from being admitted to the program,” the rule states. “In other cases, SBA determined that a rule is too expansive or indefinite and sought to restrict or clarify those rules.”

The agency conducted public meetings in 10 cities and consulted with tribes in two others. SBA received more than 230 comment letters.

“Through public meetings held in cities throughout the country, SBA gained valuable input from members of the small business community on ways to strengthen the program to provide the best opportunities for eligible firms, while also stepping up efforts to combat waste, fraud and abuse,” said SBA Administrator Karen Mills.

Arguably the biggest change affects ANCs, controversial 8(a) subentities that can win sole-source contracts of any size. For the first time, firms owned by ANCs or by Indian tribes, Native Hawaiian organizations and community development corporations will be required to report the financial benefits flowing back to their communities. Several recent news reports and congressional investigations have questioned whether the profits from ANCs are reaching disadvantaged Native Alaskans.

Each firm now will be required to submit information relating to their funding of cultural programs, employment assistance, jobs, scholarships, internships and subsistence activities, SBA said. In a change from the proposed rule, only the parent company, rather than the individual businesses or subsidiaries, will be required to report. Also, the agency delayed implementation of this provision for six months to allow further meetings with the tribal and ANC community, said John Klein, SBA’s acting director of government contracting and assistant general counsel for procurement law.

Devon E. Hewitt, a partner in the Washington law firm of Piliero Mazza, said the change recognizes the intense scrutiny ANCs are facing from Congress and watchdogs. “The question is whether they have done enough,” Hewitt said.

But some lawmakers want to go further in reforming the ANC program. On Thursday, Rep. Bennie Thompson, D-Miss., ranking member of the House Homeland Security Committee, introduced a bill that would put ANCs on equal footing with all other small businesses operating in the 8(a) program. The bill is a companion to legislation previously introduced by Sen. Claire McCaskill, D-Mo.

“All too often, small businesses are crowded out of opportunities by Alaska native corporations that receive uncapped, no-bid contracts under a special provision of the 8(a) program,” Thompson said. “This bill will assure that ANCs cannot continue in a privileged status that both protects them from legitimate competition from other businesses and fails to return a fair share of profits to Native Alaskan shareholders.”

The SBA regulations make other attempts to regulate the behavior of ANCs. Firms graduating from the 8(a) program no longer will be allowed to hand off contracts to a new subsidiary owned by the same ANC. “There is a perception that these contracts are being passed from one firm to another,” Klein said.

Several ANCs that have proposed changes to the 8(a) program applauded the rules change. “The rule-making process has been long and difficult for the Alaska native community,” said Rex Rock Sr., president and chief executive officer of Arctic Slope Regional Corporation. “The SBA struck a meaningful balance by protecting government and taxpayer interests while continuing to provide economic opportunities for disadvantaged businesses.”

The final rule also makes several significant changes to the rules guiding joint ventures, which are created when a small business partners with a non-8(a) firm, typically a larger business. These joint ventures are considered small businesses eligible to receive high-value contracts without competition.

The rule attempts to assure that the nondisadvantaged firm does not unduly benefit from the program. The 8(a) partner of the joint venture must now perform at least 40 percent of the work, including those awarded through a mentor-protégé agreement. The previous statutory language required only that the small business perform a “significant portion” of the work, Hewitt said.

Joint ventures awarded to an 8(a) firm also will not be allowed to win more than three contracts during a two-year period, and these entities cannot subcontract work to a non-8(a) joint venture partner. Plus, mentors who do not provide assistance to their protégés could face consequences ranging from stop-work orders to debarment.

Other proposed changes would clarify the size, income and familial determinations needed to be eligible for the 8(a) program, including those:

  • Excluding the individual retirement accounts from the strict net worth calculations that are used to determine eligibility for the program;
  • Raising the adjusted gross income to enter into the program from $200,000 to $250,000 (the total value of the participant’s assets needed to enter the program was increased from $3 million to $4 million);
  • Increasing the adjusted gross income for continued eligibility for the program from $300,000 to $350,000 (the asset level was bumped from $4 million to $6 million);
  • Allowing immediate family members of a current or former program participant to own an 8(a) firm if they are qualified to run the business and are judged not to be a front for their family member’s company;
  • Requiring that a firm’s size status remain small for its primary industry code during its participation in the 8(a) program;
  • Limiting the type and amount of fees an agent or representative can charge for assisting an 8(a) firm (the rule prohibits unreasonable fees as well as arrangements in which the fees are a percentage of the contract award or revenue); and
  • Allowing owners of 8(a) firms called to active military status to elect to be temporarily suspended rather than lose any of their nine-year term in the program.

— by Robert Brodsky – GovExec.com – February 11, 2011

Filed Under: Contracting News Tagged With: 8(a), Alaskan Native, ANC, joint venture, SBA, small business, small disadvantaged

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