Georgia Tech Procurement Assistance Center

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

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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

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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

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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.

WOSB program: Company ineligible because husband managed business

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A self-certified woman-owned small business was ineligible for a WOSB set-aside contract because the woman owner’s husband held the company’s highest officer position and appeared to manage its day-to-day operations.

A recent SBA Office of Hearings and Appeals decision highlights the importance of ensuring that a woman be responsible for managing the day-to-day business of a WOSB–and that the woman’s role be reflected both in the corporate paperwork and in practice.

OHA’s decision in Yard Masters, Inc., SBA No. WOSB-109 (2017) involved an Army solicitation for grounds maintenance services.  The solicitation was issued as a WOSB set-aside under NAICS code 561730 (Landscaping Services), with a corresponding $7 million size standard.

Keep reading this article at: http://smallgovcon.com/women-owned-small-business-program/wosb-program-company-ineligible-because-husband-managed-business/

SBA hopes to cut back on the hoop jumping for government contractors, WOSBs

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The Small Business Administration is closing in on a proposed rule that will lighten the load for both its contracting officers, and the women-owned small businesses (WOSB) looking to work with the federal government.

Sean Crean, director of SBA’s Office of Government Contracting, said SBA is about 30-60 days away from putting a rule out for public comment, establishing a WOSB certification process.

“What will eventually happen, after this process is complete, we will implement a policy where contracting officers no longer have to go into an electronic file cabinet, they’ll be able to rely on the fact that SBA has now got an approved certified firm and it’ll be on parity with the other certification programs that we have like HUBzone, as well as the 8(a) program,” Crean said during said last week during the ChallengeHER event in Washington, hosted by SBA, Women Impacting Public Policy (WIPP), and American Express OPEN. “And then their choices as a contracting officer become very simple.”

The certification issue dates back to the National Defense Authorization Act of 2015, when Congress said it wanted two things for WOSBs, Crean said: certification for this type of small business, and for WOSBs to have sole-source contract opportunities available to them.

Keep reading this article at: https://federalnewsradio.com/contracting/2017/10/sba-hopes-to-cut-back-on-the-hoop-jumping-for-government-contractors-wosbs/

Auditors criticize SBA’s management of small business programs

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In a report released on June 30, 2017, the Government Accountability Office (GAO) reaffirmed “long-standing management challenges” within the Small Business Administration’s operation of several small business contracting activities “resulting in inefficient program operations.”

The programs impacted include small businesses in the socioeconomic categories of small disadvantaged businesses (SDB), women-owned small businesses (WOSB), service disabled veteran-owned small businesses (SDVOSB), and historically underutilized business zone (HUBZone) small businesses.

For three of the small business programs, GAO specifically found:

HUBZone Program
  • There is no specific guidance or criteria for making requests for supporting documentation in connection with applications made as a part of the HUBZone certification process.
  • Because of shortcomings in the recertification process, there is not reasonable assurance that only qualified firms are allowed to continue in the HUBZone program.
  • Despite some automation put in place by the SBA, there is a backlog of firms in the recertification pipeline, required within a three-year time frame.
8(a) Program
  • There is an open issue involving the need to “clearly document [SBA’s] justification for approving or denying applicants into the 8(a) program, particularly when those decisions differed from lower-level recommendations.”  The SBA’s Office of Inspector General (OIG) intends to continue to flag this issue “until this practice is documented in an SOP or desk guide for the program.”
  • The OIG reports that it has received documentation on thirty 8(a)-certified firms that it earlier found did not meet all of the eligibility requirements, and plans to issue an analysis of that documentation in a forthcoming report.
WOSB Program
  • SBA validated an earlier OIG report by agreeing that 40 percent of the WOSB concerns that the OIG questioned were not, in fact, eligible to receive contracts under the WOSB program at the time of award.
  • While the FY15 National Defense Authorization Act (NDAA) eliminated SBA’s self-certification process for the WOSB program, the SBA has not yet implemented a process to eliminate self-certification.
  • “As a result of inadequate monitoring and controls, such as not implementing a full certification program, potentially ineligible businesses may continue to incorrectly certify themselves as WOSBs, increasing the risk that they may receive contracts for which they are not eligible.”
  • Until a new certification program required by the FY15 NDAA is implemented, “oversight of third-party certifiers and enhancing examinations of WOSB firms are needed to help ensure that only eligible businesses participate in the WOSB program.”

GAO’s complete report can be seen at: http://www.gao.gov/assets/690/685569.pdf.

Here is a list of earlier GAO audits of SBA’s small business programs, linked to the full reports:

 

Agencies largely maintain small business contracting scores

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Under the new leadership of Trump appointee Linda McMahon, the Small Business Administration last week released its annual scorecard on federal agencies’ small business contracting, proclaiming that the government overall met its mandatory goals for the fourth year running.

The average agency award rate of 24.34 percent of contracting dollars in fiscal 2016 going to qualified small businesses totaled $99.96 billion, a bump-up of $9 billion over fiscal 2015, SBA reported. While all the goals were met, the percentages of money going to small firms were slightly lower than those of fiscal 2015.

Prime contracting dollars rose in all set-aside categories, and the government exceeded the Small Disadvantaged Business goal and had its highest achievement ever for percentage of contract dollars awarded to Service-Disabled Veteran-Owned small businesses.

“It is a win-win for federal agencies to get small business contracts into the hands of the innovative small business owners that create jobs in their communities and help to fuel the nation’s economy,” McMahon said.

Keep reading this article at: http://www.govexec.com/contracting/2017/05/agencies-largely-maintain-small-business-contracting-scores/138211/

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

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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.

Familial relationship affiliation: SBA treats spouses as ‘one party’

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The author of this article, Steve Koprince, is also author of the book entitled “The Small-Business Guide to Government Contracts.”

One common way that contractors attempt to avoid affiliation is by limiting a particular individual to a minority ownership interest (often 49%).

But as a recent SBA Office of Hearings and Appeals case demonstrates, when a company’s owners are spouses (or other close family members), the SBA may disregard the legal ownership split, and treat the family members as one person for purposes of the affiliation rules.

OHA’s decision in Size Appeal of Gregory Landscape Services, Inc., SBA No. SIZ-5817 (2017) involved an Army solicitation seeking grounds maintenance at Fort Rucker, Alabama.  The solicitation was issued as a WOSB set-aside under NAICS code 561730 (Landscaping Services), with a corresponding $7.5 million size standard.

After opening bids, the Air Force announced that Gregory Landscaping Services, Inc. was the apparent awardee.  An unsuccessful competitor then filed a size protest.  Although the size protest was untimely, the SBA saw potential merit to the protester’s allegations.  The SBA adopted the size protest and initiated a size determination.

Keep reading this article at: http://smallgovcon.com/sbaohadecisions/familial-relationship-affiliation-sba-treats-spouses-as-one-party/

2016 SBA scorecard includes ups, downs, impact of overseas contracts

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If one is a chance, two’s a coincidence, and three is a pattern, does four set a standard?

For the fourth year in a row, the federal government reached its small business contracting goals, spending nearly $100 billion — or 24 percent of its contracting dollars — on small businesses.

That’s a $9 billion increase over fiscal 2015 numbers. The government also scored an A+ on its procurement scorecard, according to the Small Business Administration (SBA).

“It is a win-win for federal agencies to get small business contracts into the hands of the innovative small business owners that create jobs in their communities and help to fuel the nation’s economy,” said SBA Administrator Linda McMahon in a statement.

Keep reading this article at: https://federalnewsradio.com/contractsawards/2017/05/13929632016-sba-scorecard-includes-ups-downs-impact-of-overseas-contracts/

For another view of this news story see: “Government Misses HUBZone, WOSB Goals–But Gets “A” Grade Anyway” at: http://smallgovcon.com/women-owned-small-business-program/government-misses-hubzone-wosb-goals-but-gets-a-grade-anyway

 

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