Georgia Tech Procurement Assistance Center

Credit for lower-tier subcontracts toward small business subcontracting goals

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It has been a long time coming, but it appears that the government will (finally) amend the Federal Acquisition Regulation (FAR) to align with prior changes by the Small Business Administration (SBA) concerning credit for lower-tier small business subcontracting.

The propose rule addresses changes to FAR 19.704 and 52.219-9 to marry the regulation up with SBA’s amendments.

We first covered this issue back in 2016 when SBA issued a final rule amending the small business subcontracting plan regulations.  SBA’s amendment allows large prime contractors on federal jobs to receive credit for lower-tier subcontracting awards to small businesses and other socio-economically disadvantaged firms.  That is, rather than limit credit to first-tier subcontracts, prime contracts may count the awards their first-tier subcontractors make to small businesses towards their subcontracting goals.

Continue reading at:  Fox Rothschild LLP

Small business advocate wins $475,000 in legal fees after 4-year fight with federal government

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After four years and expenses of more than $700,000, a California-based small business advocate on Thursday won an agreement from the Justice and Defense departments to pay his legal fees for litigation forcing the government to release confidential contracting data.

Lloyd Chapman, the outspoken founder of the Petaluma-based American Small Business League, declared victory in what he called an “historic” move by Judge William Alsup of the U.S. District Court for the Northern District of California to require the government to pay Chapman $475,000.

Neither Justice nor the Pentagon would comment on the case to Government Executive, but Chapman’s award was confirmed by his Washington attorney, Jon Cuneo of Cuneo, Gilbert & Laduca.

Keep reading this article at: https://www.govexec.com/contracting/2018/08/small-business-advocate-wins-475k-legal-fees-after-4-year-fight-government/150280/

DoD must work harder to include small business contractors, audit says

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An audit of two Army Contracting Command centers in Redstone, Alabama and Warren, Michigan, revealed The Department of Defense (DoD) must increase its efforts in order to meet small business subcontracting goals.

The DoD Inspector General Audit was carried out in three different branches. One audit was performed on the Army, and two each on the Marine Corps and the Air Force. According to the audit, small businesses may have lost opportunities because protocols were not followed which could have encouraged more small businesses to be part of the federal marketplace.

Small businesses have been specifically included in the federal contract bidding process to both support and encourage growth in communities across the country. Head of the House Small Business Committee U.S. Rep. Sam Graves (R-Missouri) announced in Nov. 2017 his desire to raise the federal government’s contracting goal for small businesses to 25 percent, a two percent increase from the current 23 percent target for contracts to be awarded to small businesses today.

Keep reading this article at: https://smallbiztrends.com/2018/05/defense-contracts-for-small-businesses.html

Army told to improve monitoring of small business subcontracts

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Staff at two Army Contracting Command locations sometimes neglected to assure that contractors gave appropriate subcontracts to small businesses, the Pentagon watchdog found.

Though most of the officials located at Redstone Arsenal in Alabama and Army Contracting Command in Warren, Michigan, were given a clean bill of health, officials working on 23 contracts valued at $918 million “did not ensure that prime contractors provided small businesses with adequate subcontracting opportunities,” the Defense Department inspector general said in a report dated March 19.

The review of 80 Army contracts completed in fiscal 2015-2016 found that prime contractors provided adequate subcontracting opportunities for 27 contracts valued at $694 million.

But a subset worth $331 million were signed without a subcontracting plan or a contracting officer’s determination that no subcontracting possibilities existed.

Keep reading this article at: http://www.govexec.com/contracting/2018/03/army-told-improve-monitoring-small-business-subcontracts/146931/

GSA holding small business networking session Feb. 8th in Savannah

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The General Services Administration’s Office of Small Business Utilization and Hoar Construction LLC are holding a networking session for small businesses on Feb. 8, 2018 in Savannah, Georgia.

Background

On Sept. 28, 2017, GSA awarded a contract in the amount of $22,819,862 to Hoar Construction of Birmingham, Alabama to design and build the new Tomochichi Courthouse Annex in Savannah.  Since Hoar is not a small businesses, the firm is required to develop an acceptable small business subcontracting plan in accordance with FAR 19.7.  The event being planned on Feb. 8th is designed to facilitate small business participation in the project.

The scope of design/build contract includes: design/construction documents and construction work, consisting of all labor, equipment, and materials for a complete build-out.  The project includes space for one bankruptcy courtroom and chambers, the bankruptcy clerk, and space for the U.S. Probation Office.  The total space requirement is approximately 35,000 square feet of office space and 11,000 square feet of parking for 25 cars,  for a total of 46,000 gross square feet, available for personnel, furnishings and equipment, with occupancy planned for the year 2020.  The newly constructed Courthouse Annex will be located on GSA-owned property, on a site between Barnard Street, West Your Street, Whitaker Street, and West State Street in Savannah.

Networking Event

Prospective attendees at the small business networking event are to register their company with the GSA Contacting Officer listed below via email.  Due to space availability, the GSA asks that no more than two (2) persons per firm be represented.  Call-in reservations will not be accepted.  The networking session is intended to review the scope of the project, review the project site, and conduct a GSA Small Business Networking forum among attendees.

Contact information: Swindale Rhodes, Contracting Officer, Email: swindale.rhodes@gsa.gov

Date and Time: February 8, 2018, 1:30 pm

Location of Event: 124 Barnard Street, J.G. Lowe “B” Building, 3rd Floor, Savannah, GA 31401

Small business activist wins interim victory against Pentagon, Sikorsky

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For four years, the small but vocal American Small Business League has argued that large federal contractors mislead agencies and the public by overstating their use of small businesses as subcontractors to meet statutory goals.

In U.S. District Court in San Francisco last Friday, attorneys for the advocacy group led by Lloyd Chapman and based in Petaluma, Calif., successfully pried out the previously non-public names of suppliers and other subcontractors used by Sikorsky Aircraft Corp.

The helicopter maker had joined with the Defense and Justice departments in seeking to withhold such information as proprietary when submitted to the Pentagon under its 27-year-old Comprehensive Subcontracting Plan Test Program, designed to measure corporate potential for increasing small business opportunities in subcontracting.

Small business booster Chapman has long challenged the Pentagon’s program as nonproductive and oriented mostly toward obfuscating the degree to which large contractors win defense business intended for smaller ones.

Keep reading this article at: http://www.govexec.com/contracting/2017/11/small-business-activist-wins-interim-victory-against-pentagon-sikorsky/142611 

3 ways to make the most of your subcontract

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Are two businesses better than one?

For many small businesses, teaming with a larger and more-established government contractor as a subcontractor may be a great way to gain experience and build a reputation with government agencies.

Despite the many advantages of teaming, subcontractors can sometimes find themselves out in the cold if they don’t take the proper steps to assure inclusion once the contract is awarded.  In fact, according to the American Express Trends in Federal Contracting for Small Businesses report, 31 percent of small business government contractors reported that they participated on a winning bid as a subcontractor, but the prime contractor never used them during the fulfillment of that contract.

No need to be pessimistic!  Many small businesses (including my own) have fruitful experiences teaming up as a subcontractor.  Here are three ways to help subcontractors receive their share of a winning bid and put themselves on the path to more work.

Keep reading this article at: https://www.federaltimes.com/opinions/2017/10/23/3-ways-to-make-the-most-of-your-subcontract-commentary/

Accuracy of federal small business contracting data challenged

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Published on Forbes.com on June 5th, an article entitled, “Trump Administration Fails At Creating Jobs By Missing Small Business Contract Targets,” contends that the Small Business Administration (SBA) significantly inflates government small business data by including billions in federal contracts to Fortune 500 firms in the volume of contracts the SBA claimed were awarded to small businesses.

The author of the article, Professor Charles Tiefer, is widely recognized as one of the nation’s leading experts on government contracting, federal contracting law and legislation. He is a Professor of Law at the University of Baltimore School of Law.  Professor Tiefer has written several legal opinions that challenge the accuracy of small business contracting data released by the SBA.

The SBA released their report for fiscal year 2016 claiming small businesses received $99.96 billion in federal contracts and 24.34 percent of all federal contracts in 2016.

In his article, Professor Tiefer states, “Of the $99.96 billion the SBA claimed went to small businesses, it appears no more than 50% of that number went to firms that currently legally qualify as small businesses. In reality, legitimate small businesses may well have received no more than $50 billion in federal contracts and subcontracts in FY 2016. That would come out to just mid-single digit percentages of the full level of federal acquisitions for FY 2016, a far cry from the 24.34 percent claimed by the SBA.”

Tiefer also accuses the SBA of excluding the majority of federal acquisitions from their calculations in claiming small businesses received 24.34 percent of all federal contracts. He states, “First, the SBA is counting federal acquisitions for FY 2016 at around $410 billion. That is an artificial and unconvincing low figure. I have written in the past that the actual figure is more than double that.”

Professor Tiefer served as solicitor and deputy general counsel of the U.S. House of Representatives for 11 years. He also served as Commissioner on the Congressionally chartered, federal Commission on Wartime Contracting in Iraq and Afghanistan from 2008-2011.

Source: http://www.einnews.com/pr_news/388077084/professor-charles-tiefer-challenges-accuracy-of-government-small-business-data

DoD identifies and explains small business goals for buying commands

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Did you know that goals are in place to ensure that small businesses have the maximum practicable opportunity to compete for contracts with the federal government?

In fact, each federal agency must set annual goals for participation in its contracts by small businesses and specific groups of small businesses, including woman-owned small businesses (WOSBs) small-disadvantaged businesses (SDBs), HUBZone-certified small businesses and service-disabled, veteran-owned small businesses (SDVOSBs).

Dr. James Galvin, the Acting Director of the  Office of Small Business Programs (OSBP) for the Dept. of Defense, negotiates DoD-wide small business goals with the Small Business Administration (SBA).  Dr. Galvin also assigns specific small business goals to DoD buying commands.  In fiscal year 2016, DoD exceeded its small business prime contracting goal, awarding more than $57 billion in prime contracts to small businesses.

Government-wide Small Business Contracting Goals
  • 23 percent of prime contracts for small businesses
  • 5 percent of prime and subcontracts for WOSBs
  • 5 percent of prime and subcontracts for SDBs
  • 3 percent of prime and subcontracts for HUBZone-certified small businesses
  • 3 percent of prime and subcontracts for SDVOSBs
How Agency Goals are Negotiated and Established

Every year, SBA works with federal agencies to establish small business contracting goals. SBA ensures that the sum total of all of the individual agency goals exceeds the 23 percent target established by Congress.

Here is how the process works:

  1. SBA negotiates with agencies, including DoD, to establish individual agency goals that, in the aggregate, constitute government-wide goals. SBA also negotiates a small business subcontracting goal based on recent achievement levels. SBA establishes the government-wide and agency socio-economic category goals at their statutory levels.
  2. Before the beginning of the fiscal year, SBA reviews agency year-to-date performance and agencies submit their proposed goals to SBA.
  3. SBA’s Office of Government Contracting determines if these individual agency goals, in the aggregate, meet or exceed the government-wide statutorily mandated goals in each small business category.
  4. SBA notifies the agencies of their final agency goals.
DoD Small Business Prime Contracting Goals

DoD’s fiscal year 2017 small business prime contracting goal is 22 percent. In other words, we aim to award at least 22 percent of small-business-eligible prime-contract spending to small businesses in fiscal year 2017. We also have prime contracting goals for WOSBs (5 percent), SDBs (5 percent), HUBZone-certified small businesses (3 percent) and SDVOSBs (3 percent).

The federal government has the following statutory goals for government-wide small business procurement:

In fiscal year 2016, DoD spent more than 60 percent of the federal procurement budget eligible for small businesses.
DoD Small Business Subcontracting Goals

In addition to prime contracting goals, DoD has goals for awarding subcontracting spending to small businesses. Our fiscal year 2017 subcontracting goal is 34 percent. In addition to the overall subcontracting goal, we have subcontracting goals for WOSBs (5 percent), SDBs (5 percent), HUBZone-certified small businesses (3 percent) and SDVOSBs (3 percent).

Component and Agency Small Business Prime Contracting Goals

DoD’s overall fiscal year 2017 small business prime contracting goal is 22 percent, but the Army’s fiscal year 2017 small business prime contracting goal is 26 percent. Because the Army buys a lot of products and services provided by small businesses, e.g., construction, its goal is higher than DoD’s overall goal. The Navy and Air Force have goals that are lower than DoD’s overall goal because they buy a lot of aircraft and ships, which are typically supplied by large businesses.

The chart below identifies the fiscal year 2017 prime contracting goals for 22 DoD buying commands.

Calculation of Achievements

At the end of every fiscal year, SBA measures DoD’s achievements against our goals. SBA requests a report from the Federal Procurement Data Center calculating the prime and subcontract statistical achievements. If we fail to achieve any proposed prime or subcontracting goal, we are required to submit a justification-and-corrective-action plan to SBA.

Small Business Procurement Scorecard

SBA releases an annual scorecard to measure how well federal agencies reach their small business and socio-economic prime contracting and subcontracting goals.

DoD’s fiscal year 2017 grade will be based on the following four factors:

  • Prime contracting (50 percent)
  • Subcontracting (20 percent)
  • Compliance with the requirements of Section 15(k) of the Small Business Act (20 percent)
  • Comparison of the number of prime contracts awarded to small businesses in fiscal year 2017 versus fiscal year 2016 (10 percent)
DoD Fiscal Year 2016 Scorecard Grade

In fiscal year 2016, DoD exceeded its small business prime contracting goal of 21.26 percent, achieving 22.94 percent. The SBA’s fiscal year 2016 small business procurement scorecard awarded DoD an “A.”  DoD exceeded three out of five of its small business prime contracting goals.

Civilian Agency Goals

In addition to DoD, SBA negotiates small business procurement goals with 23 civilian agencies. Click here to see the fiscal year 2017 goals for civilian agencies.

Subscribe

Email osd.business.defense@mail.mil with “subscribe” in the subject line to receive important policy updates from DoD OSBP.

Source: https://medium.com/@BusinessDefense/dod-fy-2017-small-business-goals-4fb1c1c61e61.

Pentagon wins court round on disclosing Sikorsky subcontracting plans

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pentagon-sealDefense Department attorneys won an appeals court decision on Jan. 6 that denies a demand from a small business advocacy group that Sikorsky Aviation Corp. be required to disclose its subcontracting plan submitted under a long-standing Pentagon program.

The U.S. Court of Appeals for the 9th Circuit ruled against the Petaluma, Calif.-based American Small Business League, saying that forcing the helicopter maker to disclose its subcontracting plan would put it at a competitive disadvantage.

Small business booster Lloyd Chapman has long challenged the Pentagon’s 27-year-old Comprehensive Subcontracting Plan Test Program as nonproductive and oriented mostly toward obfuscating the degree to which large contractors win defense business intended for smaller ones.

Keep reading this article at: http://www.govexec.com/contracting/2017/01/pentagon-wins-court-round-disclosing-sikorsky-subcontracting-plans/134472

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