Speedy Payments? Yes Please.

The Federal Acquisition Regulation (FAR) is changing to allow government contracting small businesses to get paid within 15 days of invoicing. Furthermore, the Department of Health and Human Services (HHS), the Department of the Treasury (Treasury), the Department of Homeland Security (DHS) and the General Services Administration (GSA) are working together to issue a memorandum that authorizes the expedited payments in advance of the updated changes to the FAR. (JDSUPRA, May 14, 2020)

Contractors should contact their government Contracting Officer to facilitate those payments. For example, a DHS Small Business Innovation Research (SBIR) recipient currently paid within 30 days of invoicing may be eligible for a contract modification to accelerate payments upon the exercise of any options under that contract. (ibid)

The National Defense Authorization Act for Fiscal Year 2020, Section 873, requires agencies to establish an accelerated payment date for certain contracts with a goal of payment 15 days after an invoice is received, if a specific payment date is not established by the contract. The change will be implemented via an applicable FAR revision.

Other formal additions to the FAR include 52.212-5 (Contract Terms and Conditions Required to Implement Statutes or Executive Orders РCommercial items), FAR 52.213-4 (Terms and Conditions РSimplified Acquisitions (Other Thank Commercial Items)), and FAR 52.244-6 (Subcontracts and Commercial Items.) (ibid)

This is great news for small businesses looking to decrease hardships produced by the COVID-19 pandemic.

Questions about the FAR changes and the expedited payment memorandum? Give us a call.

In the Navy (with Small Business)

The U.S. Navy, Office of Naval Research is offering $30 million in grants through 31 May to companies providing advanced technology. Through this effort, the Navy is funding its supply chain to ensure that their contractors can stay in business during the pandemic. An additional $250 million in small business awards is expected over the next 90 days. (FedScoop, April 28, 2020)

Awards are through the Small Business Innovation Research and Small Business Technology Transfer grant programs, which get money to small businesses more quickly than traditional solicitations. The following technologies are of interest:

  • modernization and sustainment
  • digital logistics
  • deployable manufacturing
  • resilient communications (ibid)

James Geurts, the Navy’s lead acquisition official, said the department is monitoring its supply chain in real-time with new tools to maintain stability. Many worry that a faltering economy and the shelter in place regulation will affect the supply chain and the military’s readiness. Guerts says the Navy is closely watching its research and development for emerging technology so as to stay a step ahead. (ibid)

Other Navy research offices are also serving as “technology enablers.” The Naval Expeditions Agility Office is looking for ways to better connect warfighters to tech experts and small businesses. Here again, the goal is to bring advanced technology solutions to national security challenges while helping small businesses to continue working with the Navy. (ibid)

Are you a small business with advanced technologies the Navy can use? Give us a call.

Accelerating Money to Small Business

If the Accelerating Defense Innovation Act passes Congress, small businesses with more than 50 percent of venture capital funding will find it easier to obtain Small Business Innovation Research (SBIR) grant money from the Department of Defense (DoD). To date, legal hurdles have prevented DoD from utilizing these companies. (Fedscoop, May 21, 2019)

The SBIR, created in 1983, provides small businesses with grants to help them expedite product development, and offers follow-on funding and assistance to provide guidance meeting requirements during the government purchasing process. In 2003, courts ruled that companies owned (more than half) by venture capital firms were ineligible for SBIR grants. Then in 2011, a waiver was created by Congress for those small businesses that are majority-owned by venture investors. These waivers required congressional notification as well as Small Business Administration approval. (ibid)

Unfortunately, DoD has never used the waiver. Defense Contracting Officers continue to shy away from small businesses funded through venture capital. Rep. Mac Thornberry (R-Texas), the new legislation sponsor, cited a recent example of a small satellite technology startup that visited DoD’s Hacking 4 Defense program but did not receive an SBIR grant because of the majority capital investment in the firm, even though their technology is cutting edge. (ibid)

A new pilot program, on which the legislation is based, allows the Secretary of Defense and service acquisition executives for each arm of the military to make an SBIR award to a small business that is majority-owned by domestic venture investors. The bill will allow no more than 15 percent of DoD SBIR program funds to be awarded to these small businesses. Its end date of September 30, 2022. (ibid)

Aside from SBIR, small tech companies can look at other ways to work with the DoD. For instance, the Defense Innovation Unit currently handles commercial innovation pilot projects. Once testing is complete, any DoD branch may procure from a small business, generally within 90 days of the first contact with the company. (ibid)

Rep. Thornberry, the ranking Republican on the House Armed Services Committee, would like to include his legislation in the 2020 National Defense Authorization Act (NDAA).

EZGSA has information about this and other ways small businesses can obtain government contracting. Give us a call at 301-913-5000.