Georgia Tech Procurement Assistance Center

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

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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.

Infrastructure projects should include more minority- and women-owned contractors

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The need to rebuild, repair, operate and maintain our country’s infrastructure is, and always will be, an ongoing endeavor. The problem is that minorities, women, veterans and other groups are seldom the contractors or high-wage earners on infrastructure projects.

Historically, the primary funding source for the U.S. Dept. of Transportation and its infrastructure projects is an 18.4¢-per-gallon gasoline tax and a 24.4¢-per-gallon tax on diesel fuel that millions of consumers pay at the pump. These taxes account for nearly $200 billion annually. In addition to the federal tax, states collect gasoline taxes that often are much higher, with some state rates adding as much as 57¢ per gallon to a fuel purchase. Couple these taxes with airport fees, tolls and so on, and we see that much of America’s infrastructure is supported by consumers—people who should have the right to participate in rebuilding it. The inclusion of all Americans must be a top priority for local, state and federal representatives and the companies awarded these contracts.

As financial models for these projects become more creative, including the wider use of public-private partnerships (P3s), we need to ensure that funds are being used for their intended purpose—to rebuild infrastructure—and that all Americans benefit from this funding.

Keep reading this article at: https://www.enr.com/articles/44181-infrastructure-projects-should-include-more-minority–and-women-owned-contractors

DoD awards more than $230 billion to minority- and women-owned businesses from 2010-2016

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The Government Accountability Office (GAO) recently released a report (GAO-18-195R) reviewing the number and types of DoD contracts awarded to minority-owned and women-owned businesses.

The good news for minority- and women-owned contractors is DoD obligated more than $230 billion from FY 2010-2016. These obligated amounts were awarded through almost 444,500 contracts.

While DoD’s obligations decreased by 12 percent over this time, from more than $36 billion to almost $32 billion, this decrease was significantly less than the approximately 27 percent decrease in overall DoD contract obligations for the same period.

The obligated amounts cover both products and services, but services dominate, constituting approximately 75 percent of the awarded dollars. More than 80 percent of the awards were fixed-price contracts, with the remaining awards being cost-reimbursement, and time-and-materials/labor-hour contracts. The top product was information technology software more than $3 billion, while the top service was professional engineering and technical support more than $14 billion.

 

Source: http://www.mondaq.com/article.asp?articleid=668958

Two women are bridging a gap between the construction industry and new technology

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Across the globe, thousands of millennials are starting businesses on the premise today’s smartphone technology can create new value and disrupt entire industries.

Most of these digital revolutionaries will fail, for the usual reasons: they lacked industry contacts, targeted the wrong market, underestimated users’ resistance to new technology, or couldn’t raise capital in a saturated ecosystem.

But Kitchener, Ont.-based Bridgit has found the formula for disrupting markets. Through deep industry knowledge, a tight focus on customer value, and sheer hard work, its founders — Mallorie Brodie and Lauren Lake — are changing the way the construction industry shares data across Canada and in major U.S. cities.

It’s a mission Lake, 24, has taken personally since she began working in construction while studying structural engineering at Western University in London, Ont. “I showed up on a job site with my iPhone, and got handed a clipboard,” she recalls. The hundreds of inputs required in a major construction project were still being recorded on paper, Excel spreadsheets and Post-It Notes, making sharing this information difficult and costly.

Keep reading this article at: http://business.financialpost.com/entrepreneur/growth-strategies/how-these-women-are-bridging-a-gap-between-the-construction-industry-and-new-technology/wcm/2314374f-7c92-4250-b21b-973f7517fefb?utm

Woman in DBE front scheme gets 12 months in federal prison

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The former owner of a suburban Chicago construction business convicted of acting as an illegal front so another company could secure a lucrative city airport contract was sentenced Thursday (Mar. 16, 2017) to 12 months in federal prison.

Lawyers for Elizabeth Perino had sought probation and home confinement, but U.S. District Judge Gary Feinerman said he opted for prison to send a message to “an industry that needs to clean up its act.”

Perino’s conviction is the latest turn in an eight-year saga sparked in 2008 when Perino’s former project manager filed a whistleblower lawsuit alleging misconduct in massive projects run by industry giant McHugh Construction, a century-old company that reported more than a half-billion dollars in revenue in 2015.

That sparked a joint investigation by federal prosecutors and Illinois Attorney General Lisa Madigan resulting in the criminal charges.

Perino’s company posed as a legitimate woman-owned business, allowing Chicago-based Diamond Coring Co. to meet its requirements for hiring disadvantaged businesses in order to win a multimillion-dollar runway repair contract at O’Hare International Airport. Perino did no work for the bills submitted by her company.

Keep reading this article at: http://www.chicagotribune.com/news/local/breaking/ct-phony-woman-business-owner-sentencing-met-20170316-story.html

SBA releases scorecard on small business participation in federal contracts

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The U.S. Small Business Administration (SBA) last week released its annual Small Business Procurement Scorecards, which provide an assessment of each federal agency’s annual small business contracting achievement against its goal using a grading system of A+ through F.  Government-wide, agencies received an “A” in FY 2015, reflecting achievement of small business goals in all categories except on behalf of HUBZone firms.

According to the SBA, the federal government reached its small business federal contracting goal for the third consecutive year, awarding 25.75 percent in federal contracts to small businesses totaling $90.7 billion.  The 25.75 percent of contracts awarded to small businesses represent the highest ever percentage of contracts awarded to small businesses by the government.

Small Business Goal Scorecard - All Agncies FY15

Last month, the SBA announced at a press conference that for the first time in history, the federal government has met the 5 percent goal for contracting with women-owned small businesses and record achievements for service disabled veteran-owned and small disadvantaged businesses. More information about these contracting figures can be found here.

At the individual agency level, five agencies’ grades increased from FY 2014, 16 agencies’ grades stayed the same and 3 agencies’ grades decreased.  The agency breakdown is as follows:

  • 3 agencies received an “A+” (GSA, SBA, and DOT)
  • 18 agencies received an “A”
  • 3 agencies received a “B” (HHS, NASA, and VA)
  • No agencies received a C, D, or F

Despite the fact that SBA awarded an “A” grade to 18 agencies, most of them did not meet all of the government’s overall small business goals.  The Energy Department, for example, did not meet any of the government’s five small business goals.  USAID met only two of the five goals.  Of the 18 agencies receiving a score of “A,” only Agriculture, Homeland Security, Interior, State, Treasury, and NRC met all five governmentwide goals.

About SBA’s Scorecard

According to the SBA, its annual Scorecard is an assessment tool to: 1) measure how well federal agencies reach their small business and socio-economic prime contracting and subcontracting goals, 2) provide accurate and transparent contracting data, and 3) report agency-specific progress.

Every year, the SBA works with each agency to set their prime and subcontracting goals and their grades are based on the agreed upon goals.  Each federal agency has a different small business contracting goal, determined annually in consultation with SBA.  SBA ensures that the sum total of all of the goals exceeds the 23 percent target established by law.

The individual agency scorecards released by SBA, as well as a detailed explanation of the scorecard methodology, is available online at:  https://www.sba.gov/contracting/finding-government-customers/see-agency-small-business-scorecards.

Since SBA started the current small business procurement scorecard methodology in FY 2009, six agencies have received a grade of “A+” or “A” seven fiscal years in a row (FY 2009 through FY 2015):  the Departments of Agriculture, Homeland Security, Interior, Labor, Transportation, and the Environmental Protection Agency.

The overall federal small business prime contracting performance released on April 28, 2016 by the SBA, as well as a detailed explanation of the calculations, is available online at http://go.usa.gov/Nxxd.

Why are women-owned small businesses only getting 5% of government contracts?

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SBA logoIn a quintessential case of good news/bad news, the U.S. Small Business Administration (SBA) announced on March 2, 2016, that, for the first time, it met its goal in the amount of federal contracts awarded to women-owned small businesses (WOSB) — a goal that was set roughly 20 years ago.

But for a goal that took nearly two decades to reach, the total amount awarded may not sound very impressive. It was just 5.05%.

Why did it take 20 years to hit that mark—and why does it seem so low? The answers need some context, says John Shoraka, SBA associate administrator.

Keep reading this article at: http://www.fastcompany.com/3057911/the-future-of-work/why-are-women-owned-small-businesses-only-getting-5-of-government-contrac

WOSB repository to be replaced with new SBA portal

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SBA logo smallOn Wednesday, March 23, 2016, the U.S. Small  Business Administration (SBA) posted a notice on its website indicating that the on-line repository where women-owned small businesses (WOSBs) upload ownership and control documentation has been inactivated.  SBA’s notice indicates that the WOSB repository will be replaced within “several weeks” by a new portal in support of the WOSB certification program.

The new portal is located at https://certify.sba.gov however, as of March 25, the site is labeled as follows: “This site is a work in progress.”   SBA says that documents previously uploaded to the repository are to be migrated to the new site.

Small businesses that are interested in submitting an offer on a solicitation that has been set aside for WOSBs under the WOSB Program must submit a checklist of certification documentation prior to responding to a federal bid or proposal solicitation.   Before SBA’s new portal is functional, it is unknown what options WOSBs have for submitting their documents.  Once certification uploads are complete, agency Contracting Officers are responsible for checking the repository to ensure all required documents have been submitted.

SBA says that it has notified Contracting Officers (COs) that the WOSB system may be unavailable for several weeks and has instructed COs to contact the SBA with individual requests to verify self-certification compliance for specific WOSBs.

More information on the WOSB program and the features of the new portal can be found at: https://www.sba.gov/content/women-owned-small-business-program.

Government meets goal set in 1994 for women’s business contracts

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After more than 20 years of effort, the federal government has, for the first time, met its goal of awarding 5 percent of the money it spent on contractors to businesses owned by women.

SBA logoSmall companies captured 25.8 percent of the government’s contracting dollars last year, representing $90.7 billion, the Small Business Administration announced last week.

About $17.8 billion of that total went to businesses owned by women during the fiscal year, which ended in September.

The news comes on the heels of a Commerce Department analysis showing that businesses owned by women are 21 percent less likely to win government contracts than otherwise similar companies. Companies owned by women tend to be younger and smaller than other businesses, but even accounting for those differences, the disparity remains, the agency found.

Commerce Dept.The government set its 5 percent target in 1994 for spending on women-owned businesses, which are defined as those that are at least 51 percent controlled by women. It repeatedly fell short.

Keep reading this article at: http://www.nytimes.com/2016/03/02/business/government-meets-goal-set-in-1994-for-womens-business-contracts.html

See Related stories:

Fortune 500 firms continue to receive billions in federal small business contracts – http://gtpac.org/2016/02/22/fortune-500-firms-continue-to-receive-billions-in-federal-small-business-contracts/

Commerce Dept. says odds of women-owned businesses winning federal contracts are off by 21 percent – http://gtpac.org/2016/02/19/commerce-dept-says-odds-of-women-owned-businesses-winning-federal-contracts-are-off-by-21-percent/ 

Commerce Dept. says odds of women-owned businesses winning federal contracts are off by 21 percent

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SBA sealThe odds of businesses owned by women winning a federal contract are about 21 percent lower than for otherwise similar companies, and years of effort to increase those chances have barely made an impact, according to a new report from the Commerce Department.

Commerce Dept.The report is being released as the federal government is beginning to change a Small Business Administration program that is five years old this week, yet has never met a goal of helping companies owned by women win at least 5 percent of federal contract dollars.

The changes, which were required by a 2014 law that also mandated the report, now make such businesses eligible for no-bid contracts so they can gain the experience needed to win other, competitive projects.

Keep reading this article at: http://www.nytimes.com/2016/02/03/business/smallbusiness/businesses-owned-by-women-less-likely-to-win-us-contracts-study-shows.html?_r=3

See Commerce Department report at: https://www.sba.gov/sites/default/files/wosb_study_report.pdf

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