BAA TAA SBA Huh?

It appears the Buy American Act (BAA) and the Trade Agreements Act (TAA) may, under certain instances, actually reduce the federal market accessibility for US manufacturers. (Federal News Network, October 28, 2019)

In order to be considered for a small-business set-aside, end-items must be manufactured in the U.S. Or the company can qualify as a non-manufacturer (13 CFR 121.406) if:

  • The company is principally engaged in the retail or wholesale  of the product and normally sells the type of product being supplied
  • The company takes ownership of the item with its personnel, equipment or facilities consistent with industry practice and
  • The company supplies the end item of a small business manufacturer, processor or producer made in the U.S. or obtains a waiver of the requirement. (ibid)

Non-manufacturers may receive an individual waiver if the Small Business Administration (SBA) accepts the contracting officer’s determination that no small business manufacturer “reasonably can be expected to offer a product meeting the solicitation specifications.” Additionally, the SBA Administrator may provide a class waiver if she determines that no small business manufacturer “product or class of products is available to participate in the Federal procurement market.”

Of course, TAA restricts product acquisition to manufacturers in the U.S. and certain “designated countries,” (those companies that have a Free Trade Agreement with the U.S. or participate in the World Trade Organization Government Procurement Agreement (WTO GPA)). Therefore, products from non-signatory countries such as China are ineligible for award.  Per FAR 25.101(a), BAA restricts the purchase of non-domestic end-products as well. Some exceptions provide more access to foreign end-products than under the TAA; for instance, BAA makes exceptions where the domestic offer is not the low offer (FAR 25.103) as well as in certain instances of public interest for non-availability in the U.S., and at an unreasonable cost. (ibid)

TAA does not apply to small business set-asides, FAR 25.401, leaving the BAA in place. The waiver of the non-manufacturer rule for a set-aside gives a somewhat illogical result. This makes the TAA inapplicable to set-asides, and the BAA applicable to set-asides where the non-manufacturer rule has been waived. This might result in the Government purchasing an item, such as a medical/surgical product, manufactured in a non-designated country that has subsidized its price to assure the product’s selection. Therefore, the intended law restricting non-domestic products actually facilitates more access to those products. This includes products of manufacturers from non-designated countries, rather than providing controlled access over non-domestic end-products. (ibid)

Ultimately, this could harm small and non-small manufacturers producing domestically. This may also open up small business set-asides to products made in China that would otherwise be ineligible for purchase if the TAA applied. A good deal more statutory guidance and analysis are warranted. (ibid)

Do you have questions about your compliance obligations under an upcoming proposal or current contract? Give us a call.

Scrubbing the FAR

The Federal Register Publications requests comments on the following three proposed Federal Acquisition Regulation (FAR) rules:

  1. FAR Case 2015-002 – the rule proposes to amend the FAR to require electronic submission of DD Form 254, Contract Security Classification Specification. This form is used to communicate security requirements to contractors when the performance of contract requirements requires access to classified information and the form acts to automate processes and workflows. (This form is also used by prime contractors to communicate in the same manner to subcontractors.) Comments should be submitted by September 10, 2019, via the Federal eRulemaking portal. (Acquisition.gov)
  2. FAR Case 2018-007 – the rule proposes to amend the FAR  by revising thresholds subject to inflation adjustments so that the periodic inflation adjustments will apply to existing contracts and subcontracts that contain the revised clauses. The next rule raising thresholds for inflation is planned to go into effect, October 2020. Comments are due by August 23rd, via the Federal eRulemaking portal. (Acquisition.gov)
  3. FAR Case 2018-003 – the rule proposed by NASA, GSA, and DOD is to amend the FAR to implement section 1614 of the National Defense Authorization Act for the Fiscal year 2014 and regulatory changes made by the Small Business Administration (SBA). (Section 1614 addresses credit for lower-tier small business subcontracting.) (ibid) 

Additionally, the following are up for review.

  • Section 1614 of the NDAA for FY 2014 amended the Small Business Act when a prime contractor has an individual subcontracting plan for a contract with a single executive agency, the prime contractor receives credit towards its subcontracting goals for awards made to small business concerns at any tier by subcontractors with individual subcontracting plans. Additionally,  section 1614 provides new assurances for offerors relating to activities to be performed by the contractor to monitor the performance of subcontractors subcontracting plans, and by subcontractors to monitor the performance of their subcontractors subcontracting plans. Section 1614 requires the contractor to demonstrate procedures established to ensure subcontractors at all tiers comply with their subcontracting plans. Section 1614 also revised the definition of “subcontract” in the Small Business Act. (Acquisition.gov)
  • Per SBA’s final rule, the prime contractor’s performance under an individual subcontracting plan will be evaluated based on its combined performance under the first-tier and lower-tier goals. Additionally, the final rule implements the statutory requirements related to the new assurances and written statement to be included in subcontracting plans. Comments are due by August 26th via the Federal eRulemaking portal. (regulations.gov)

Working through how these FAR changes will affect your current contract, or future bidding/contracts? Give us a call and we can explain.

Self Certification — No More ;-(

The 2015 National Defense Authorization Act mandated that the Small Business Administration (SBA) discontinue self-certification of women-owned and other small businesses. In 2020, SBA plans to finalize a self-certification rule that closes a loophole allowing participants in the SBA’s Women-Owned Small Business (WOSB) program to self-certify. (Federal News Network, June 2019)

Approximately one-quarter of all federal contracts are held by small businesses, which over the past six years has helped federal agencies to  exceed  SBA’s governmentwide small business contracting goal. This year’s spending of more than $120 billion on small business contracts surpasses last year’s spending by nearly $15 billion.

The Government Accountability Office reported in March that almost 40 percent of WOSB-certified businesses were ineligible. Meanwhile, SBA’s Office of Inspector General June 2018 audit found 89 percent of sole-source (50 out of 56 contracts) did not meet all program criteria. Basically, there is currently no way to know if the contracts, listed in the chart below, were actually eligible for the sole-source awards. (ibid)

Rob Wong, SBA’s associate administrator of the Office of Government promotes a formal certification to  give the program some much-needed integrity. Wong said, “simply put, the wrong companies were receiving our contracts, we want to make sure that, if a company receives a contract through these programs, they’re actually eligible to receive it.” (ibid)

SBA has subsequently published a proposed rule in the Federal Register eliminating self-certification and providing a free online certification application to WOSB. Comments on the proposed rule are being accepted until July 15. In Wong’s opinion, it is high time to streamline the vetting process for the many other set-aside programs, all of which have different sets of eligibility criteria. Wong feels that going to three formal certifications for 8(a), Historically Underutilized Business Zones, women-owned, and service-disabled veterans will unify the processes. The rule with set-aside screening is expected to take a year for the changes to take effect. (ibid)

Do you have questions about the new certification process and how it may affect your current contract or an upcoming opportunity? Give us a call at 301-913-5000.

It’s about time “Hidden Figures” get a little love

Although the government has met their small business spending goals over the past five years, women-owned small business contracts continue to lag far behind. In fact, women-owned small business contracts make up less than 5 percent of the total government contract expenditures, according to ChallengeHER, a national initiative to boost government contracting opportunities for women-owned small businesses.

Candace Waterman, president, and CEO of Women Impacting Public Policy (WIPP) said her group advocates for women-owned businesses on the Hill. But now, working through ChallengeHER, she has a forum to help educate women. SBA specialists from the agency’s Procurement Technical Assistance Center (PTAC) help train women via ChallengeHER on how best to enter the federal marketplace. (Federal News Network January 2, 2019)

Antonio Doss, SBA’s Washington, D.C. metro area district director, feels that in the DC area female small business owners have found particular success in the IT field.“We have women business owners who are excelling in that area, proving support to agencies like NASA and the Department of Energy, DoD facilities and very technical, scientific, STEM-type disciplines,” he said. (ibid)

Along with agency-to-business contracting, subcontracting opportunities abound. Questions? Call us at 301-913-5000.

 

 

 

 

 

 

 

HUBZone Relief!

The Small Business Administration (SBA) is proposing major changes to the Historically Underutilized Business Zone or HUBZone program. The Federal Register defines a HUBZone as, “small business concerns are those that have a principal place of business located in a HUBZone and 35 percent of their employees residing in one or more HUBZones. After SBA certifies eligible businesses into the program, they become eligible for HUBZone contracting preferences. HUBZone areas are generally defined as areas with low income levels, high poverty and unemployment rates, Indian reservations, closed military bases, or disaster areas.”

SBA is seeking comments on the following:

  • eliminating the burden on HUBZone small businesses to continually demonstrate that they meet all eligibility requirements at the time of each offer and award for any HUBZone contract;
  • requiring only annual recertification;
  • allowing small firms to count employees as living in a HUBZone if they move out of the area after initial certification or if the area no longer qualifies as a HUBZone.

You have more than a month to comment, so let SBA know what you think. Submit all comments with the identifier RIN 3245-AG38 by either the Federal eRulemaking Portal or mail (for written, CD, or disk submissions) to Mariana Pardo, Director, HUBZone Program, 409 Third Street SW, Washington, DC 20416.   (Federal Register)

Give us a call for assistance with your comments at 301-913-5000.