Small Business Programs
Small Business Administration
Office of Government Contracting
Presented by
Ms. Marichu Relativo
Procurement Center Representative (PCR)
Guam Oct 2010
www.sba.gov
Basis for the Small
Business Programs
 Small Business Act
 To aid, counsel, assist & protect the interests of
small business concerns
 Goal of policy is to ensure that a fair proportion
of purchases, contracts & subcontracts be
placed with small businesses
“Level the Playing Field”
http://www.sba.gov/library/lawroom.html
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What is a Small
Business?
 Organized for profit
 Place of business in the U.S.
 Operates primarily in the U.S. or makes
significant contribution to the U.S. economy
Taxes, U.S. products, materials or labor
 Cannot be dominant in its field on a national basis
 Self Certification in the Central Contractor
Registration (CCR) database
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Small Business is
Determined by
Measured by its employment, business
receipts, or business assets
Meet the numerical small business size
standard for its industry
SBA Table of Size Standards
North American Industry Classification
System (NAICS) industries codes
Size Table: http://www.sba.gov/size
NAICS: http://www.osha.gov/oshstats
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Small Business
Programs & Government-wide
Goals
 23% - Small Business (SB)
 5% - Small Disadvantaged Business (SDB)
(includes 8(a) Business Development)
 5% - Women-owned Small Business (WOSB)
 5% - Service Disabled Veteran Owned SB
(SDVOSB)
 3% - HUBZone Small Business
FAR Part 19, Public Laws, Code of Federal
Regulations (13 CFR)
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Government-wide Goals &
Score Cards
 Goals negotiated between SBA and the President
 Goals are monitored & reported by SBA
 Prior to 2009 – Color codes/After 2009 – Letter grade
 Reports are published in the SBA website
 Government-wide overall grade for 2009 – “B” or 94.1
 Dept of Defense overall grade for 2009 – “B” or 93.6
http://www.sba.gov/aboutsba/sbaprograms/goals/SCORECARD2009.html
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What are the Governing
Regulations?
 Title 13 of the Code of Federal Regulations (CFR)
121 -Small Business Size Regulations
124 -8(a) Business Development/SDB Programs
125 -Government Contracting Programs (including
the SDVOSB Program)
126 -HUBZONE Program
 Federal Acquisition Regulation (FAR)
 FAR Part 19
 DFARS, AFFARS, AFARS, EFARS, etc
FAR Part 19, Public Laws, Code of Federal Regulations (13 CFR)
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Small Business Size
Standards
Firms must be small based on their primary
NAICS Code, including affiliates
Size is determined either by:
Average 3 years revenues
Number of employees
Manufacturers
Dealers
Wholesalers
Source: 13 CFR 121 Size Regulations
Website: http://www.sba.gov/regulations/121/
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Common Size Standards
 500 employees – most manufacturer & mining
industries
 100 employees – all wholesales trade industries
500 employees – for federal prime contracts &
subcontracts
 $6.5M – most retail & service industries
 $31M – most general & heavy construction industries
 $13M – all special trade contractors
 $0.75M – for most agricultural industries
Source: 13 CFR § 121.104;13 CFR § 121.106; 13 CFR 121.201
Website: http://www.sba.gov/regulations/121/
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Size Standards Update
 Size Standard Final Rule issued October 6, 2010
Effective November 5, 2010
Last change July 2008
 To Expand Opportunities for Small Businesses
Keep up with the economy
Keep up with federal contracting marketplace
 The upcoming changes:
Sector 44-45, Retail Trade
Sector 72, Accommodation and Food Services
Sector 81, Other Services
Source: Federal Register 61597, 61604, 61591
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Small Business
Programs
What is the 8(a) Small Business
Development Program?
FAR Part 19, Public Laws, Code of Federal
Regulations (13 CFR)
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Who are Socially
Disadvantaged Individuals?
Subjected to racial or ethnic prejudice or
cultural bias because of their identity as members
of a group
 Social disadvantage must stem from circumstances
beyond their control
 In the absence of evidence, individuals who are
members of the following designated groups are
presumed to be socially disadvantaged:
13 CFR 124.103
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Who are Socially
Disadvantaged Individuals?
 Black Americans
 Hispanic Americans
 Native Americans (American Indians, Eskimos, Aleuts, and Native
Hawaiians)
 Asian Pacific Americans (persons with origins from Japan, China, the
Philippines, Vietnam, Korea, Samoa, Guam, U.S. Trust Territory of the
Pacific Islands [Republic of Palau], Commonwealth of the Northern
Mariana Islands, Laos, Cambodia [Kampuchea], Taiwan; Burma, Thailand,
Malaysia, Indonesia, Singapore, Brunei, Republic of the Marshall Islands,
Federated States of Micronesia, Macao, Hong Kong, Fiji, Tonga, Kiribati,
Tuvalu, or Nauru; Subcontinent Asian Americans (persons with origins
from India, Pakistan, Bangladesh, Sri Lanka, Bhutan, the Maldives Islands
or Nepal), and
 Members of other groups designated by the SBA
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Small Disadvantaged
Business (SDB)
 At least 51% owned by one or more individuals who
are both socially and economically disadvantaged
 Must be citizen of the United States
 Must manage and control daily business operations
 Have management or technical expertise directly
related to the primary product or service of the
business
 SBA-no longer certifies SDB as of Oct 08
 Self certify in CCR & ORCA
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8(a) Business Development
Program
 See definition as the Small Disadvantage Business (SDB)
 In business at least two years
 Certified and approved by SBA
 Program is for nine years
 First 4 years – Developmental Stage
 Last 5 years – Transitional Stage
 Monitored by SBA local district office
 Early graduation
 Government-wide goal: 5 %
 SDB & 8(a) goals combined
13 CFR 124.8
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8(a) Set-Aside
 Sole source up to $3.5M / $5.5M for manufacturing
NAICS
 Unlimited amount to Alaska Native Corp (ANC) firms
 Sole Source & Competitive 8(a) over $100K
 For competitive 8(a) – agency submits offer letter to the SBA
district office serving the geographical area in which the
procuring activity is located;
 For competitive and open construction requirements – agency
submits offer letter to the SBA district office serving the
geographical area in which the work is to be performed
 For competitive 8(a) - Rule of two applies
13 CFR 124.8; FAR19.8
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8(a) Set-Aside cont
For sole source 8(a):
Sole source is not protestable
Withdrawal from the 8(a) program – Submit request
to SBA with justification/approval must be obtained
prior to changing acquisition
Competitive 8(a) can be restricted to a state or
region
Example: Alaska 8(a) firms only or Region 10 8(a)
firms only (include restriction in the synopsis)
13 CFR 124.502 and FAR 19.8
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8(a) Set-Aside cont
 Sole Source and competitive 8(a) under $100K
 For sole source – agency contacts SBA for firm’s eligibility prior to
award
 For competitive – agency submits waiver request letter to SBA for
approval
 Sole Source 8(a) – synopsis in FBO not required
 “8(a) stays 8(a)”
 Unless it is a new requirement (25% increase in scope from previous
requirement)
 All construction requirements are considered new requirements
 Adverse impact – SBA‘s written determination that acceptance of
the procurement for 8(a) award would have an adverse impact on
small business (see 13 CFR 124.504(c))
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8(a) Business Development
Application Process
Electronic Application on line: www.sba.gov
Hard copy application – mail to:
Small Business Administration
Division of Program Certification & Eligibility (DPCE)
455 Market Street, 6th Floor
San Francisco, CA 94105
Tel: (415-744-0328
13 CFR 124.8
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Small Business
Programs
What is the HUBZone Program?
FAR Part 19, Public Laws, Code of Federal
Regulations (13 CFR)
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HUBZONE
 Must be owned & controlled at least 51% by
 U.S. Citizen, Community Development Corporation, an
agricultural cooperative, or Indian tribe
 Principal office must be located within HUBZone
 Includes land in Indian Country/Reservation
 Includes military facilities closed by the BRAC Act
 Employees – 35% must reside in a HUBZone area
 Must be a small business by SBA standards
 Certification by SBA – no term limit
 Joint Venture (JV) only with another HUBZone firm
Source: 13 CFR 126.607(b); FAR 19.1305(a)
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HUBZONE Prime
Contract Benefits
 Competitive HUBZone Set-aside
 Rule of Two – Reasonable expectation for competition
 Fair market price
 Sole Source – only one source available
 Not exceed $5.5M – manufacturing NAICS code
 Not exceed $3.5M – all other NAICS codes
 Full/Open – 10% preference on price
 Government-wide goal - 3%
HUBZone area: http://www.sba.gov/hubzone (search by address)
On line Application: https://eweb1.sba.gov/hubzone/internet
Website: http://www.sba.gov/hubzone
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Small Business
Programs
What is the Service Disabled
Veteran-Owned Small Business
Program (SDVOSB)?
FAR Part 19, Public Laws, Code of Federal
Regulations (13 CFR)
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Service Disabled VeteranOwned Business
 The Veterans Benefit Act of 2003
 Procurement can be set aside or sole source
 Rule of Two – Reasonable expectation for competition
 Only VA can set aside for veteran-own small business
Required to register in http://www.vip.vetbiz.gov/
 Self certification in CCR
 Under review due to abuse
 Government-wide goal: 3 %
Source: 13 CFR 125.8 – 125.13; FAR 19.307
Website: http://www.vetbiz.gov/
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Veterans First Buying
Authority
 Dept of Veteran’s Affair (VA) program
 First & second priorities for contracting procurement
 Service-Disabled Veteran-owned small business (SDVOSB)
 Veteran-owned small business (VOSB)
 Must register – Vendor Information Pages (VIP) database






Veteran status verified – Veterans Benefit Administration’s BIRLS System
Only one registration for one company allowed
DUNS number required
DD Form 214 required
Fraudulent claims – debarred for five years
Verification of status – once a year
Website: www.vetbizresourcecenter.org
Register: http://www.vetbiz.gov/
VBA Office: 800-827-1000
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Small Business
Programs
What is the Woman-Owned Small
Business Program (WOSB) &
Economically Disadvantaged
Woman-Owned Small Business
(EDWOSB)?
FAR Part 19, Public Laws, Code of Federal
Regulations (13 CFR)
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Woman-Owned Small
Business (WOSB)
 WOSB - At least 51% owned & controlled by one or
more women
 EDWOSB - Economically Disadvantaged & WOSB
 Manage daily business operations
 No outside employment
 United States Citizen
 Self-certification - CCR & ORCA
 Government-wide goal: 5%
Woman Business Center (WBC):
http://www.sba.gov/aboutsba/sbaprograms/onlinewbc
http://www.sba.gov/services
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WOSB/EDWOSB
New Ruling
 Set-aside preference effective February 4, 2011
 Certification as small business & WOSB/EDWOSB
 By Federal agency, State Government, or national certifying
entity approved by SBA
 By the contracting officer supported by adequate
documentation
 Self-Certification in CCR & ORCA
WOSB Federal Contract Program Webpage
http:www.sba.gov/wosb
1-800-U-ASK-SBA (827-5722)
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WOSB/EDWOSB
New Ruling
 Third-Party Certification
 Third Party Certifier approved by SBA
 U.S. Dept of Transportation’s (DOT) Disadvantaged
Business Enterprise (DBE) Program
 As an 8(a) participant
 Must be provided to the WOSB Program Repository
 Contracting Officer set-aside to WOSB/EDWOSB:




Designated 83 NAICS codes currently underrepresented
Rule of Two – Reasonable expectation for competition
$5 Million – Manufacturing / $3 Million all others
Fair and reasonable price
Final Rule on 13 CFR Parts 121, 124, 125
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Teaming Arrangements
 Two or more companies form a partnership or joint
venture to act as prime contractor
 Desirable to provide the best combination of
performance, cost, quality, and delivery
 Formal and informal / traditional/non-traditional
 Limitation on subcontracting (small business to selfperform on the contract)
 Construction – 15 %
 Services – 50%
 Supplies – 50%
 Specialty Trade – 25%
Guam Oct 2010
Labor
only
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Types of Teaming
Arrangements
Prime/Subcontractor relationship (traditional)
Joint Ventures (JV)
Mentor Protégé
SBA approved mentor protégé
http://www.sba.gov/aboutsba/sbaprograms/8abd/ment
orprogram/index.html
Must be approved by SBA in advance
Reference: 13 CFR 124.520
Dept of Defense approved mentor protégé
http://www.acq.osd.mil/osbp/mentor_protege/
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Joint Venture (JV)
 Each firm should be small to stay small (revenues combined)
 8(a) JV must be approved by SBA
 HUBZone JV – both firms must be HUBZone
 SDB JV may be entitled to price adjustment in competitive acquisition under
authorized NAICS codes
 SDVOSB JV – the SDVOSB 51 ownership for SDVOSB set asides
 Performance of Work (Self-perform by JV)
 Service – 50%
 Supplies – 50%
Labor
only
 Construction – 15%
 Special Trade – 25%
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Mentor Protégé
 SBA approved mentor protégé
 The protégé must be an 8(a) firm
 The mentor can be a large business
 The protégé can joint venture with the mentor
 Mentor can be a large business/doesn’t impact the small
business size status
 Participate on any acquisition (set-asides or not)
 Dept of Defense (DOD) mentor protégé –
 Provide mutual benefits to the small business and the other
more established business
 Protégé receives the assistance (financially, technical,
managerial)
 Mentor provides subcontracting opportunities to Protégé
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Order of Preference
 Parity among the following:
 8(a) BD
 HUBZone
 SDVOSB
 WOSB – Preference status – effective February 5, 2011
 Underrepresented NAICS codes set aside to
WOSB/EDWOSB
 General Rule: “Once 8(a) – Stays 8(a)”
 Per FAR 19.8/13CFR 124
 Exception: New requirement or requirement increased by
25%
 Construction requirement – considered new requirement
 Same applies to the other Small Business Programs
 Geographic Restriction on set aside:
 None
 Exception: Alaska ANC/8(a) firms
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Small Business Set Aside
Rule
 Under Simplified Acquisition Threshold (under $150,000):
 FAR 19.502-2(a) -- automatically reserved exclusively for
small business concerns (including 8(a), HUBZone,
SDVOSB)
 Rule of Two – two of more firms available to do the work
 Above Simplified Acquisition Threshold – Order of Precedence:
CFR References:
13 CFR 126.607(b) – HUBZone
13 CFR 125.19(b) – SDVOSB
13 CFR 124.503 (j) – 8(a)
FAR References:
19.501(c),(d),(e)
19.800(e) – 8(a)
19.1305(a) – HUBZone
19.1404(d) – SDVOSB
19.1405(a), (c) – SDVOSB
Websites: http://farsite.hill.af.mil/
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Size Protest
 Who can submit a size protest?
 Firm involved in the acquisition
 Who handles Size Protest?
 SBA Office of Government Contracting (Size Specialist)
 Forward the Size Protest to the GC office servicing the
firm’s principal office location
 For Guam firms – send to:
Small Business Administration**
Office of Government Contracting, Area 6
455 Market Street, 6th Floor
San Francisco, CA 94105
Phone: 415-744-8429
**Please call Carol Bunts at (415) 744-6844 before forwarding your size status protest
Guam Oct 2010
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Size Do Matter
 Micro-Purchase:
 Supplies (under $3,000)
 Service (under $2,500)
 Construction (under $2,000)
 Simplified Acquisition:
 Reserved for small business set aside (under $150,000)
 Rule of Two
 Formal Acquisition:
 Bids & Proposals (over $150,000)
 Consider small business set aside
 Rule of Two
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Register/Update Your
Business
Complete Central Contractor Registration
Database (CCR)
Keep Current (Update yearly)
www.ccr.gov
Complete SBA Profile (Dynamic Small
Business Search (DSBS)
 http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm
Complete on-line Representations and
Certifications Application (ORCA)
 https://orca.bpn.gov/
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Additional Assistance
 Local District Offices and Resource Partners
 SBA Guam Brand Office – Ken Lujan
([email protected]) /Tel: 671-472-7277
 SBA Procurement Center Representative (PCR) –
Hawaii, Guam & Pacific Insular Area – Larry Orr
([email protected])/ Tel: 808-474-7317
 Procurement Technical Assistance Center (PTAC)
http://www.guamptac.com/
 Small Business Development Centers
www.sba.gov/sdbc/
Small Business Specialists (SBS)
www.acq.osd.mil/sadbu
Guam Oct 2010
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Questions?
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