Georgia Tech Procurement Assistance Center

SBA to end WOSB/EDWOSB self-certification after watchdogs flag ineligible companies

By

With one in four dollars spent in federal contracts now going to small businesses, the Small Business Administration is looking to give more teeth to the verification process for companies that claim to meet the criteria for this lucrative market.

For the sixth year in a row, agencies exceeded SBA’s governmentwide small business contracting goal and spent more than $120 billion on small-business contracts, exceeding last year’s record by nearly $15 billion.  Agencies awarded 25 percent of their contract spending to small businesses in fiscal 2018 and earned an overall ‘A’ rating on SBA’s annual small business scorecard.

But next year, SBA expects to have finalized a rule that would close a loophole that allowed for participants in SBA’s Women-Owned Small Business (WOSB) program to self-certify they’re eligible for the program.

The Government Accountability Office reported in March that about 40% of the WOSB-certified businesses in its audit sample were ineligible for the program.  GAO had also expressed concerns about the performance of several third-party WOSB certifiers.

“As a result, SBA cannot provide reasonable assurance that WOSB program requirements are being met and that the program is meeting its goals,” GAO auditors wrote.

Continue reading at:  Federal News Network

Agencies improved on small business goals, but can do more

By

Federal agencies improved on their commitment to award contracts to small businesses in 2018, though they still fell behind in goals for contract awards to women-owned small businesses, according to the Small Business Administration’s procurement scorecards released June 25.

The government as a whole received an “A” for 2018 — meaning that it met or exceeded 100 percent of the goals set for small business contracting that year — a grade that it has maintained for the past five years.

The Departments of Education, Commerce and the Treasury led the pack of 24 agencies that were evaluated, each earning an A+ and meeting over 130 percent of the established goals for small business contract awards.

Meanwhile, the Office of Personnel Management, Department of Health and Human Services, the Agency for International Development and the National Science Foundation failed to meet their small business contract goals, with NSF achieving the lowest score at just over 85 percent of their goal.

But despite the overall successes for small business contract awards, some categories of small businesses failed to meet governmentwide metrics.

Continue Reading at:  Federal Times

SBA OHA: Owners did not have enough managerial experience to qualify concern as a WOSB

By

SBA’s socio-economic set-aside programs mandate compliance with multiple control requirements.  An important one stipulates that a woman owner of a WOSB (or a veteran for a SDVOSB or a disadvantaged owner for an 8(a) business) must have the “managerial experience of the extent and complexity to run the concern.”

But what, exactly, does this requirement entail?  A recent OHA case provides some important guidance.

In C & E Industrial Service, Inc., SBA No. WOSB-112 (Apr. 8, 2019), a WOSB was awarded a contract for rebuilding four parking lots at the White Sands Missile Range in New Mexico.  An unsuccessful offeror filed a protest alleging that the women owners did not, in fact, own C&E.  It also alleged that the women owners were not qualified to lead a construction firm.  (Although the protest and subsequent proceedings at SBA and OHA discussed ownership and control issues, here we’ll focus solely on the control issues.)

Continue reading at:  SmallGovCon blog

SBA proposes changes for the Women-Owned Small Business and 8(a) programs

By

The U.S. Small Business Administration (SBA) has published a proposed rule to amend its regulations to implement a statutory requirement to certify Women-Owned Small Businesses (WOSBs) and Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs) participating in the SBA’s Women-Owned Small Business Program, under which those businesses can be eligible for set-aside and sole source awards.

The WOSB Federal Contract Program, set forth in section 8(m) of the Small Business Act, 15 U.S.C. 637(m), authorizes contracting officers to restrict competition to eligible WOSBs or EDWOSBs for federal contracts in certain industries.  The 2015 National Defense Authorization Act amended the Small Business Act to allow for sole source awards to WOSBs and EDWOSBs.  In addition, the 2015 NDAA amended the Small Business Act to create a requirement that a concern must be certified as a WOSB or EDWOSB (by a federal agency, a state government, SBA, or a national certifying entity approved by SBA), in order to be awarded a set aside or sole source contract under the WOSB Federal Contract Program.

The proposed rule would permit an entity to be eligible for award under the program as long as its application is pending.  If that offeror were selected for award, its application would be prioritized by SBA and a determination would be made within 15 days.  This provision acknowledges that SBA may have difficultly processing all the potential applications in a timely manner, given the approximately 10,000 firms currently in the WOSB repository.  The anticipated influx of applications from these firms would likely overwhelm the SBA, which processes approximately 3,000 applications a year for 8(a) status and 1,500 a year for HUBZone status.

Continue reading at:  Holland and Knight

SBA proposes new rule to establish a formal WOSB/EDWOSB certification process

By

The U.S. Small Business Administration published a proposed rule that will establish a process by which SBA will formally certify firms as Women-Owned Small Businesses (“WOSBs”) or Economically Disadvantaged Women-Owned Small Business (“EDWOSBs”).  The SBA is seeking public comments on the proposed rule by July 15, 2019.  To submit comments, visit:  https://www.federalregister.gov/documents/2019/05/14/2019-09684/women-owned-small-business-and-economically-disadvantaged-women-owned-small-business–certification.

See the SBA Press Release here.

The following proposals are included in the new rule:

  • Allow participation from an expanded list of federal and state entities with existing certification programs, and confirm the continued participation of approved third-party certifiers.
  • Eliminate the self-certification option consistent with the Small Business Act as amended within the  National Defense Authorization Act for Fiscal Year 2015, Public Law 113-291, and require approved third-party certifiers to notify applicants of its fees and the option to use SBA’s free online certification process.
  • Revises the economic disadvantage requirements for the 8(a) BD program to be consistent to the economic disadvantage requirements for women-owned firms seeking EDWOSB status.

Read more at:  The Federal Register

Meeting the definition of a small business concern — A checklist

By

This is a  Checklist for existing or prospective federal government contractors to determine whether they can meet the definition of a small business concern (SBC) under the Small Business Act (SBA).

This Checklist includes the definitional thresholds and size standards for SBCs.

This Checklist can also be used to determine if an SBC can qualify under a specific small business category, including:

  • the 8(a) Business Development Program,
  • a Veteran-Owned Small Business (VOSB),
  • a Service-Disabled Veteran-Owned Small Business (SDVOSB),
  • a Women-Owned Small Business (WOSB),
  • an Economically Disadvantaged Women-Owned Small Business (EDWOSB), and
  • a Historically Underutilized Business Zone (HUBZone) SBC.

See the Checklist and related details at: https://www.jdsupra.com/legalnews/meeting-the-definition-of-a-small-42284/ 

SBA’s IG questions eligibility of women-owned small businesses to receive contract set-asides

By

Federal contracting officers, along with firms representing themselves as woman-owned small businesses (WOSBs) did not comply with federal regulations in 50 instances of sole-source contract awards.  As a result, there is no assurance that the contracts were awarded to firms eligible to receive sole-source awards under the WOSB program administered by the Small Business Administration (SBA).

That’s the conclusion reached by the SBA’s Office of Inspector General (OIG) in a report issued on June 20, 2018.

The OIG undertook its review of SBA’s WOSB program to determine whether the sole-source provisions that Congress included in the 2015 National Defense Authorization Act (NDAA) were being effectively implemented.   Congressional intent was to expand the number of federal contracts being awarded to WOSBs and streamline the process by which WOSB status could be validated.  Thus, in its review, the OIG wanted to determine whether sole-source contract awards comply with program requirements, and whether firms that receive the set-asides conform to the self-certification requirements.

The OIG selected a sample of 56 contracts, worth $55.7 million, to review.  The sample represented 81 percent of the sole-source contracts awarded to WOSBs between the period of Jan. 1, 2016 and Apr. 30, 2017.  The OIG determined that federal regulations were not followed by federal officials or the WOSB firms themselves in connection with 50 of the 56 contracts.  The 50 contracts were valued at $52.2 million.  Based on its findings, the OIG determined that there “was no assurance that these contracts were awarded to firms that were eligible to receive sole-source awards” under the WOSB program.

The weaknesses noted in the OIG’s report are similar to those noted in a review conducted in 2015.  Then, the OIG recommended that SBA should increase its training and outreach to both federal contracting officials and businesses regarding their responsibilities under the WOSB program.

Once again, in its latest report, the OIG makes a series of recommendations to SBA administrators to remedy the newly-identified problems.  Among them:

  • The SBA should prevent contracting personnel from awarding contracts to ineligible firms by implementing a certification process that includes “reviewing, analyzing, and making an affirmative decision that applicants are eligible to participate” in the WOSB program.
  • SBA also should strengthen controls in FPDS-NG to preclude agencies from using ineligible NAICS codes for the WOSB program’s contracts.

Overall, the OIG is recommending that the WOSB program should be operated more in line with other certification programs operated by the SBA.  In response to these recommendations, however, the SBA estimates that it will take at least another year before it implements a WOSB certification process.  SBA management also states it does not have the responsibility for improving the integrity of data in FPDS-NG.

The OIG concludes that since errors are likely to continue to be made in NAICS code selection and that WOSB firms will be allowed to continue to self-certify, the program is subjected to “unnecessary risks of fraud and abuse.”  In light of this condition, the OIG’s recent report offers six specific recommendations the SBA should take now to expand oversight and prevent agencies from awarding contracts to ineligible firms.

Woman-owned small business webinar to be held June 13th

By

The Georgia Tech Procurement Assistance Center (GTPAC) is conducting a free webinar on the morning of June 13, 2017, covering all aspects of the Small Business Administration’s Woman Owned Small Business Program.

The webinar will discuss the differences between women-owned small businesses (WOSBs) and economically disadvantaged women-owned small businesses (EDWOSBs).  Also to be covered includes:

  • the ownership, control, and financial net worth standards;
  • the NAICS codes eligible under the WOSB Program;
  • the set-aside rules;
  • third-party certifier and self-certification procedures;
  • SBA’s new Certify.SBA.GOV website where WOSB/EDWOSB documentation is to be uploaded;
  • the documentation and registration that WOSBs and EDWOSBs are expected to maintain;
  • limitations on subcontracting;
  • the SBA’s “eligibility examinations”; and
  • penalties.

To register for this webinar, go to https://gtpac.ecenterdirect.com/events/8304 and click on the “Sign Up” button.

Women-owned small businesses still underrepresented on government’s biggest contracts

By

Taken as a whole, the Government-wide performance metrics for small business utilization are encouraging.

The Small Business Administration’s FY2015 report card shows that the Government exceeded its prime contracting goals across four of the five socioeconomic categories measured. Moreover, the amount of federal spend going to small businesses reached an all-time high of over 25%.

These numbers do not tell the whole story, however. The 5% goal for WOSBs has been in place since 1994, and since at least 2008, major campaigns have aimed to bridge the gap. In 2014, WOSBs became eligible for sole-source awards, an important means of gaining a foothold in the federal marketplace.

 

Keep reading this article at: http://smallgovcon.com/govcon-voices/govconvoices-women-owned-small-businesses-still-underrepresented-on-governments-biggest-contracts/

Cost realism: Using offeror’s actual rates was unobjectionable

By

GAO-GovernmentAccountabilityOffice-SealIn conducting a cost realism evaluation, an agency was entitled to use an offeror’s historic approved indirect rates and current incumbent direct labor rates to upwardly adjust the offeror’s evaluated cost, in a case where the offeror’s proposed rates were significantly lower.

The Government Accountability Office (GAO) recently held that an agency did not err by adjusting a protester’s rates to better align with the protester’s historic indirect rates and current direct rates, where the agency was unable to determine that the protester’s significantly lower proposed rates were realistic.

In AM Pierce & Associates Inc., B-413128 et al. (Aug. 22, 2016), GAO considered a protest by a disappointed offeror challenging the Navy’s evaluation under a solicitation seeking program management support services for the H-60 Helicopter Program Office. The solicitation was completely set-aside for EDWOSBs. The resulting contract was to be awarded on a cost-plus-fixed-fee basis, under a best-value evaluation.

DCAA_EmblemThe solicitation said that offerors’ proposed costs would be evaluated for realism, to determine whether the overall costs were realistic for the work to be performed, reflective of the offeror’s understanding of the requirements, and/or consistent with the technical proposal. To facilitate the evaluation, the RFP required offerors to substantiate their proposed direct and indirect labor rates through payroll verification, contingent offer letters, Defense Contract Audit Agency (DCAA) rate verification or approval letters, or other detailed justification methods. The cost realism analysis would then involve a calculation of each offeror’s evaluated costs, to reflect the estimated most probable costs. This determination would include an evaluation of the offeror’s cost information — including its substantiated labor rates.

Keep reading this article at: http://smallgovcon.com/gaobidprotests/cost-realism-using-offerors-actual-rates-was-unobjectionable/

Contracting News

Read More

Contracting Tips

Read More

GTPAC News

Read More

Georgia Tech News

Read More