Transcript No Slide Title

Procurement Technical Assistance Center
Presents
Government Contracting
By
Sherry Rose
February 19, 2015
Government Contracting
OVERVIEW OF PROGRAMS
PROCUREMENT
TECHNICAL ASSISTANCE
PROGRAM
The Procurement Technical Assistance Program
(PTAP) was authorized by Congress in 1985 in an
effort to expand the number of businesses capable of
participating in the government marketplace. It is a
non-profit program funded under a Cooperative
Agreement between the federal government and local
state governments or universities, administered by the
Department of Defense, Defense Logistics Agency
NATIONAL PTAP
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Approximately 98 Centers covering U.S., Puerto
Rico and Guam
Almost 500 counselors experienced in
government contracting
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Training
Individual Counseling
Technical Assistance
Marketing
Link between small businesses and government/large business
offices
NJIT – PTAC
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One of 12 original Centers
Covers State of New Jersey w/exception of
Union County
Headquartered in Newark
Local office: Atlantic Cape Community
College, Atlantic City
Advice on selling goods & services to Federal,
State, local governments and large businesses
Over $1 Billion in prime & subcontracts
received by our clients
NJIT/PTAC WEBSITE
WWW.NJIT.EDU/PTAC
Provides links to numerous government websites,
additional contract information and contacts,
regulations, listing of upcoming events, etc.
FREE SERVICES
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Training workshops, seminars,
classes
One-on-one counseling
Advice on Government buying
process
Government regs (FAR/DFAR)
Solicitation review and analysis
Bid and proposal preparation
Federal specifications and
standards
Small business size regulations
and standards
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Registrations and certifications
System for Award Management
(SAM)
Pre-award surveys
Post-award administration
Key government and industry codes
Procurement history
Prime contract procurement
opportunities
Subcontract opportunities
Electronic bid matching
Marketing
“BE CARFUL WHAT YOU PAY FOR”
There are many commercial enterprises that target small business
owners unfamiliar with – or confused by – the various government
registration and certification processes. They market their services
energetically, sending official-looking emails directing small business
owners to sign-up for their services – for a hefty fee, of course.
Commercial websites (.com websites) are just that – commercial.
When a commercial website advertises to help you with the process
of registering to do business with the government, there is almost
always going to be a fee involved.
Government websites (designated as .gov) offer free advice
and registration.
Paid Services
Of course, there are circumstances in which it
makes sense for a small business to pay a
consultant for specialized assistance, and there are
many qualified professionals to choose from.
Research qualifications, costs, expectations, and
deliverables. Never be pressured into decisions;
careful due diligence is always the best investment
you can make.
GOVERNMENT
CONTRACTING PRIMER
GOVERNMENT CONTRACTING
DIFFERENCES
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Public accountability for public funds
Socio-economic considerations
Right to protest
Right to debrief
Rules:
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Federal Acquisition Regulations (FAR)https:www.acquisition.gov/far
Department/Agency Regulations/Supplement (e.g. DFAR)
Command Policies/Regulations
AM I READY FOR GOVERNMENT
CONTRACTING?
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Established business?
Track record? Past performance?
Sweet spot?
Prepared to research?
Understand how Government buys?
Staff up?
Know the market?
Cash flow?
SUCCESS FACTORS
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Before attempting major government marketing:
2-3 years of commercial experience
 Develop or update your business plan
 Develop a Capability Statement
 Electronic Capability
 Financial Stability
 Good customer mix
 Credit card capable
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CONTRACTING REGISTRATION
SYSTEM FOR AWARD
MANAGEMENT
www.sam.gov
Companies must register in order to be considered for any
solicitations, awards or payment
Requires a DUNS number, NAICS codes; will be assigned CAGE
code; banking information; searchable except proprietary; annual
update
Dynamic Small Business database – within SAM, searchable
database, used by federal agencies and primes to locate vendors,
requires entry and updates
CONTRACTING CODES
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DUNS – Data Universal
Numbering System
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Used to identify
companies for financial
transactions; required by
federal government for
SAM registration
No charge to obtain
DUNS number for
government contracting
purposes
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NAICS – North
American Industry
Classification System
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Groups together
economic units that use
like processes to produce
goods or services
Used to classify
businesses, contracting
requirements, and
determine size standards
KEY WAYS TO INCREASE
YOUR CHANCES
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Attend Training Workshops
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counselors explain to avoid costly
mistakes and help you optimize
strategies to obtain work.
Certification
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No pre-certification required for small
business (self-certification). Precertification required for some
preference programs (8(a), HUBZone);
verification for VOSB and SDVOSB;
repository registration
(WOSB/EDWOSB).
Focus
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Register – SAM – System for Award
Management – www.sam.gov
 Obtain DUNS number, determine
appropriate NAICS codes; provide
banking information.
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Market
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Identify Contracting Opportunities.
Register for Bid Matching through
PTAC (FBO).
Respond to “Sources Sought” and
RFIs;
Use “Interested Vendors” list; review
agency forecasts; contact Small
Business Specialists
Attend conferences and matchmaking
events; prepare Capability Statement
Follow up
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Telephone, email, hand-written note.
Say “Thank you”
CAPABILITY STATEMENT
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Capabilities
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Brief summary of company
expertise & key staff expertise
Codes
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List NAICS and FSC/PSC
codes
Certifications
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List special equipment and/or
resources
Expertise
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Type of work you can do
Facilities & Equipment
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Customers
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List special business status
Provide list of 3-4 key
customers
Contacts
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Key company contacts, email
address, phone number
MARKETING STRATEGY
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Conduct market research
Define target market
Develop contact list
Identify and understand the customer
Accumulate procurement history
Know your competition
Learn bidding process
Make capabilities known – follow up
Learn from more experienced
IT’S ALL ABOUT RELATIONSHIPS!!
MARKET RESEARCH
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http://acquisition.gov/procurement/forecosts/index.html
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Links to agency homes pages
Links to small business contacts
Links to procurement opportunities
Links to agency forecasts
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www.fpds.gov
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www.usaspending.gov
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Searchable databases for procurement history
FINDING OPPORTUNITIES
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Federal Business Opportunities: www.fbo.gov
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DLA Bid Board: www.dibbs.bsm.dla.mil
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Lists federal business opportunities; can search by number,
agency, keyword
DLA Centers register to utilize search capabilities
GSA – Federal Supply Schedules (FSS):
www.fss.gsa.gov
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Almost every product or service
Contracting officers purchase directly from vendors – task
orders, purchase orders
PROCUREMENT PERSONNEL
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SMALL BUSINESS SPECIALISTS – employed
by government agency to promote small business
within agency
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SMALL BUSINESS LIAISON OFFICER
(DIVERSITY MANAGER) – employed by prime
contractors to promote business opportunities
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SBA’S PROCUREMENT CENTER
REPRESENTATIVES – www.sba.gov/gc/pcr
PTAPS: www.dla.mil/db/procurement
TWO MINUTE PITCH
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Your name, business name, location, years in
business
Business mission and product or service
Target market or customer
Small Business status/certifications
Experience/past performance
Close w/hook (why this customer should care),
i.e., proud achievement, special niche, their
special need
GOLDEN RULE OF
GOVERNMENT MARKETING
WHEN YOU ARE DANCING WITH
THE BEAR, YOU DON’T GET TO LEAD
SPECIAL PROGRAMS
SMALL BUSINESS
REGULATIONS
FAR PART 19
13 CFR Part 121, 124, 125, etc.
SMALL BUSINESS
PREFERENCE
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Goal of 23% of government contracts awarded
to small business
Automatic set-asides
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Micro purchases
Simplified acquisition
Small purchases
Rule of two
Types of contracts
Evaluation factors: “Low price technically
acceptable”
SMALL BUSINESS
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Self certification based on size standards established by SBA
Every NAICS code has a size standard assigned
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-Service: Revenue based, average annual receipts for last three completed fiscal years
from all sources
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-Supply: Average number of employees for last 12 month period
Solicitations are classified by the Contracting Officer in the most appropriate
NAICS code that best describes what is being purchased
SBA PRE-CERTIFICATION
Requires formal application to SBA - Must be a small
business
8(a) Program: Must be unconditionally
owned and controlled by one or more
socially and economically
disadvantaged individuals who are of
good character and citizens of US;
must demonstrate potential for
success; presumptive groups of social
disadvantage; economic (net worth,
excluding primary residence and
interest in business nte $250,000 for
initial eligibility/$750,000 continued
eligibility; total assets $4.0 million
initial eligibility; $6.0 million continued
eligibility)
HUBZone (Historically Underutilized
Zones) – zones determined by Census,
updated every 10 years: concern must
be owned and controlled by U.S.
citizens, Community Development
Corporations or Indian Tribes;
principal office of concern must be
located in a HUBZone; at least 35% of
the concern’s employees must reside in
a HUBZone.
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Site map:
http://map.sba.gov/hubzone
WOMAN-OWNED
(WOSB and EDWOSB)
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83 NAICS codes
At least 51% owned, controlled and actively
managed by woman/women
EDWOSB – personal net worth $750,000;
income $350,000; assets $6.0 million
Self-certify or certified by 3rd party
Data must be uploaded in SBA repository
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www.sba.gov/wosb
VETERAN FIRST PROGRAM
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Owned, controlled and actively managed by
veteran
Set-aside preference for Service Disabled
Veteran (SDVOSB); goals for veterans (VOSB)
except awards from Veterans Administration
Verified by Center for Veterans Enterprise and
listed in VetBiz
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www.vip.vetbiz.gov
SUBCONTRACTING
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Applies to awards to large firms of contracts in
excess of $650,000 and construction awards
over $1.5 million
Requires submission of a subcontracting plan
with stated goals
Good opportunity for new-to-government
contracting firms
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http://www.sba.gov/subnet
SOLICITATION
Read, read, and read again!!!
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Set aside preference?
Area of performance?
Line of work?
In-house, subcontract or supplier requirement?
Restrictive clauses?
Obtain specs?
Profitable?
SIZE REGULATIONS
Affiliation
Some General Principles of Affiliation
(13 CFR 121.103)
 Power to Control
 Common Managers
 Common Stockholders
 Identical Business Interests
 Contractual Relationships
 Joint Venture Arrangements
General Affiliation
How does SBA determine affiliation?
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Concerns and entities are
affiliates of each other when
one controls or has the power
to control the other, or a third
party (or parties) controls of
has the power to control both
It does not matter whether
control is exercised, so long as
the power to control exists
Factors: ownership,
management, previous
relationships or ties;
contractual relationships.
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Control may be positive or
negative (e.g., negative control
where shareholder has ability to
prevent quorum or otherwise
block actions of board or
directors)
Totality of circumstances, even
though one single factor is
insufficient for finding of control.
In determining size, SBA counts
the receipts or employees of the
concern and all of its domestic
and foreign affiliates, regardless
of whether organized for profit.
Why Partner?
1) Increase Competitive Edge
2) Enhance Capabilities
3) Diversify
4) Compete with Large Firms
5) Subcontract, team, joint venture
What is a Joint Venture?
A joint venture is…an association of individuals
and/or concerns with interests in any degree or
proportion by way of contract, express or implied,
consorting to engage in and carry out no more than
three specific or limited-purpose business ventures for
joint profit over a two-year period, for which purpose
they combine their efforts, property, money, skill, or
knowledge, but not on a continuing or permanent
basis for conducting business generally.
What is a Joint Venture?
This means that…
The joint venture entity cannot submit more than three offers
over a two-year period, starting from the date of the
submission of the first offer.
A joint venture may or may not be in the form of a separate
legal entity.
The joint venture is viewed as a business entity in
determining power to control its management.
SBA may also determine that the relationship between a
prime contractor and its subcontractor is a joint venture,
and that affiliation between the two exists.
Parties to a
Joint Venture
are considered to
be affiliates if
submitting offers
on a particular
procurement.
SBA may also determine that the
relationship between a prime
contractor and its subcontractor is
a joint venture, and that affiliation
between the two exists.
What is Ostensible
Subcontracting?
A contractor and subcontractor are treated as joint
venturers if the ostensible subcontractor
will perform primary and vital requirements of a
contract or if the prime contractor is unusually
reliant upon the ostensible subcontractor.
All requirements of the contract are considered in
reviewing such relationship, including contract
management, technical responsibilities, and the
percentage of subcontracted work.
Ostensible Subcontracting: 13 CFR 121.103 (h)(4)
Seven-Factors Test
1.
Which party chased the contract?
2.
What degree of collaboration was there between the prime
contractor and subcontractor on the proposal?
3.
Which party possesses the requisite background and expertise
to carry out the contract?
4.
Who will manage the contract?
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Are there discrete tasks to be performed by each party, or is
there commingling of personnel and materials?
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What is the amount of work to be performed by each party?
7.
Which party performs the more complex and costly contract
functions?
Seven-Factors Test
The “seven factors” test is only one tool used by
SBA to evaluate whether the relationship is a true
prime/subcontractor relationship or a joint venture
under the ostensible subcontractor regulations.
It is not the exclusive test of the presence of unusual
reliance. Ultimately, a finding of unusual
reliance, which rises to the level of a joint
venture affiliation, must be a reasonable
conclusion based on the totality of the
circumstances.
To learn more
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Decisions made by the Office of Hearings
and Appeals (OHA) in Washington can
provide insight on “ostensible
subcontracting” if you’re concerned.
Go to: www.sba.gov/oha and then “search
decisions.”
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Search using key words such as
“ostensible subcontracting” or “totality of
the circumstances” or “joint venture.”
Affiliation with another partner could
result in a finding that a firm is no longer
a small business.
There is an
Exception to
Every Rule!
Exclusion from Affiliation
A joint venture arrangement
of two or more business
concerns may submit an offer as a
small business for a Federal
procurement without regard to affiliation
provided…
Exclusions
1) Each concern is small under the size standard
corresponding to the NAICS code assigned to the contract,
provided:
A) The procurement qualifies as a “bundled” requirement, at any
dollar value; or…
B) The procurement is other than a “bundled” requirement and:
For a procurement having a revenue-based size standard, the
dollar value or the procurement, including options, exceeds half the size
standard corresponding to the NAICS code assigned to the
contract…or…
Exclusions
For a procurement having an employeebased size standard, the dollar value of the
procurement, including options, exceeds
$10 million.
What is a Bundled Requirement?
Bundled requirement or bundling
refers to the consolidation of two or more
procurement requirements for goods or
services previously provided or performed
under separate smaller contracts into a
solicitation of offers for a single contract
that is likely to be unsuitable for award to a
small business.
Mentor – Protégé –
8(a) Program
Two firms approved by SBA to be a mentor
and protégé under 13 CFR 124.520 may joint
venture as a small business for any Federal
Government procurement, provided…
…the protégé qualifies as small for the size standard
corresponding to the NAICS code assigned to the
procurement,
…and, for purposes of 8(a) sole source requirements,
has not reached the dollar limit set forth in 13 CFR
124.519.
8(a) BD Participants
A joint venture or teaming
arrangement of at least one 8(a)
Participant and one or more
other business concerns may
submit an offer for a competitive 8(a)
procurement without regard to
affiliation under so long as the
requirements of 13 CFR
124.513(b)(1) are met.
Requirements of
13 CFR 124.513(b)(1)
The requirements of 13 CFR 124.513(b)(1)
include the following:
A joint venture of at least one 8(a) Participant
and one or more other business concerns may
submit an offer as a small business for a
competitive 8(a) procurement so long as each
concern is small under the size standard
corresponding to the NAICS code assigned to
the contract, provided…
Requirements of
13 CFR 124.513(b)(1)
1) The size of at least one 8(a) Participant to
the joint venture is less than one half the size
standard corresponding to the NAICS
assigned to the contract; or
2) For a procurement having an employeebased size standard, the procurement
exceeds $10 million;
Service Disabled Veteran-Owned
13 CFR 125.15 (b)
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An SDVOSB may enter into a joint venture agreement with
one or more other small businesses for the purpose of
performing an SDVOSB contract –
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Joint venture of at least one SDVOSB and one or more other
business concerns may submit an offer for a competitive SDVOSB
procurement so long as each concern is small under the applicable
NAICS code and size standard, provided:
For a revenue-based size standard, the procurement exceeds half
the size standard corresponding to the applicable NAICS code;
-For an employee-based size standard, the procurement exceeds
$10 million.
- The joint venture must contain provisions set forth in the
regulations.
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-For sole source and competitive SDVOSB
procurements that do not exceed dollar levels,
an SDVOSB entering into a joint venture
agreement with another concern is considered
to be affiliated with respect to performance of the
SDVOSB contract (annual receipts or
employees must meet applicable size standard).
SDVOSB must
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Be managing partner of jv and project manager
Receive at least 51% of net profits of jv
The jv must perform applicable percentage of work
PROPOSED CHANGES
SBA has proposed to amend its regulations
concerning mentor-protégé agreements to allow
such arrangements for all programs under the
small business umbrella. The new regulation
would apply to all preference programs and be
similar to the 8(a) program requirements. The
proposed regulation has been published in the
Federal Register for comment.
Prime Contractor Performance Requirements
(Limitations On Subcontracting) (13 CFR 125.6)
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In order to be awarded a full or partial small business set-aside contract,
8(a) contract, or other small business preference , a small business concern
must:
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In the case of a contract for services (except construction), perform at least 50
percent of the cost incurred for personnel with its own employees
In the case of a contract for supplies or products (other than procurement from a
non-manufacturer of such supplies or products), perform at least 50 percent of
the cost of manufacturing the supplies or products (not including the cost of
materials)
In the case of a contract for general construction, perform at least 15 percent of
the cost of the contract with its own employees (not including cost of materials)
In the case of a contract for construction by special trade contractors, perform at
least 25 percent of the cost of the contract with its own employees (not including
cost of materials)
An SDVOSB – same percentages apply, except percentages may be met by the SDVOSB prime contractor or
the employees of other SDVOSB’s.
A HUBZone small business – same percentages; however, service and manufacturing percentages may be met
by one or more qualified HUBZone small businesses.
NEW LIMITATIONS
In early 2013, Congress amended the statute to simplify the limitations on
subcontracting; however, neither SBA regulations nor FAR clauses have been
adopted to reflect this.
Services: “…may not expend more than 50 percent of the amount paid to the
concern under the contract”
Supplies: “…may not expend on subcontractors more than 50 percent of the
amount, less the cost of materials, paid to the concern under the contract”
Construction: Same percentages – cost of contract excluding material
Also allowed that “similarly situated entities” are not to be considered
subcontractors when applying the limitations.
Penalties for non-compliance. Many problems with interpretation, responsibilities, administration,
enforcement, baseline (final amount, task orders, IDIQ contracts, etc.)
Supply of Manufactured Products
(13 CFR 121.406)
On a small business set-aside or other preference
contract, a small business must –
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Be the manufacturer of the end item being procured
(end item must be manufactured in the U.S), or –
Qualify as a non-manufacturer, kit assembler, or
supplier under Simplified Acquisition Procedures.
Non-Manufacturer
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Does not exceed 500 employees
Is primarily engaged in retail or wholesale trade
and normally sells type of item being supplied
Will supply the end item of a small business
manufacturer or processor made in the United
States (unless a waiver has been granted by
SBA)
EXCEPTIONS: Processed under Simplified Acquisition
procedures; waiver issued by SBA.
NOTE: THERE ARE NO WAIVERS TO THE NON-MANUFACTURING
RULE FOR HUBZONE CONTRACTS (13 CFR 126.601(e)(1))
Kit Assembler
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Where the manufactured item is a kit of supplies or other
goods provided for a special purpose, the small business
offeror must –
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Have fewer than 500 employees, AND
50 percent of the total value of the components of the kit must be
manufactured by U.S. small businesses under the size standard
for the applicable NAICS code
The offeror need not itself be the manufacturer of any of the
items assembled
If the Government has specified an item for the kit which is not
produced by U.S. small business concerns, such item shall be
excluded for calculation of total value.
Simplified Acquisition
Procedures
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Where the procurement for a manufactured item
is processed under Simplified Acquisition
Procedures (13.101 of FAR – 48 CFR 1301) and
where the anticipated contract cost will not
exceed $25,000, offeror need not supply end
product of a small business concern as long as
the product is manufactured or produced in the
U.S. and the offeror has fewer than 500
employees.
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Offeror need not be manufacturer
Does not apply to subcontractors.
What is a Manufacturer?
There can be only one manufacturer of the end item being
acquired –
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With its own facilities, performs the primary activities in
transforming inorganic or organic substances, including the
assembly of parts and components, into the end item being
acquired.
End item must possess characteristics which, as a result of
mechanical, chemical or human action, it did not possess before
original substances, parts or components were assembled or
transformed.
Firms that add substances, parts or components to an existing end
item to modify its performance will NOT be considered end item
manufacturer where those identical modifications can be performed
by and are available from manufacturer.
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What are the Evaluation
Factors?
Evaluation factors:
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Proportion of total value added by efforts of the
concern, excluding costs of overhead, testing, quality
control, and profit;
Importance of the elements added to the function of
the end item, regardless of relative value;
Concern’s technical capabilities; plant, facilities and
equipment; production or assembly line processes;
packaging and boxing operations; labeling of
products; and product warranties.
Computer Assemblers
Firms that provide computer and other information
technology equipment primarily consisting of
components parts (such as motherboards, video
cards, network cards, memory power supplies,
storage devices, and similar items) who install
components totaling less than 50% of the value of
the end item are generally NOT considered the
manufacturer of the end item.
STATE CONTRACTING
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State of New Jersey:
www.state.nj.us/commerce/smallbiz
 www.state.nj.us/treasury/purchase
 www.njstart.gov
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QUESTIONS
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Procurement Technical Assistance Center
SHERRY ROSE
E-mail: [email protected]
1535 Bacharach Blvd.
Atlantic City, NJ 08401
Phone 609-343-4845
Fax: 609-343-4710