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Tag: DOD

Small Business contracts critical to DOD mission

In a January 27th memo, the Office of the Under Secretary for Defense for Acquisition and Sustainment reported small businesses are critical to their mission and spell out the steps to increase small business involvement. The memo also states the importance of meeting small business goals and prioritizing those goals over attaining Best in Class contract goals if achieving both is not possible. (Federal Computer Week January 31, 2023)

The memo further states “Best in Class contracts should be balanced with other contract strategies, including the use of set-aside contracts that can help increase diversity within the supplier. The best tools and data analysis should be utilized to support small business concerns in procurement decisions to increase small business opportunities.” (Memorandum, the Office of the Under Secretary for Defense January 2023)

The acquisition teams within the DOD will receive automatic Tier 2 spend under management or SUM credits when contracts are awarded to small socioeconomic businesses. The memo states, to track progress, a Tier 2 socioeconomic small business category will be developed. (Federal Computer Week January 31, 2023)

The Department of Defense has three main strategic goals to increase small business participation:

  • Leverage programs that were originally meant to expand the industrial base.
  • Increase set-asides.
  • Greatly reduce entry barriers. (ibid)

The memo provides a foundation for the DOD to make certain small business activities are in alignment with the department’s national security priorities.

Deputy Secretary of Defense Dr. Kathleen Hicks feels that reducing barriers and creating more opportunities for small businesses will enable the department “to expand, innovate and diversify, increasing our warfighter advantage strengthening our supply chains, increasing competition in our marketplace and growing our economy here at home.” (ibid)

The memorandum recommends DOD acquisition personnel look to gain additional resources through the Acquisition University website.

Are you a small business looking to work with the Department of Defense? Give us a call.

The SBA & DOD are teaming up to reinforce Small Business Development

On Friday, December 2, 2022, the Defense Department and the U.S. Small Business Administration signed a memorandum of understanding (MOU) for both agencies to better meet the needs of small businesses in the United States. The goal is to bolster small business development, both nationally and locally. (Executive Gov December 9, 2022)

Farooq A. Mitha, director of small business programs at DOD, and Mark Madrid, associate administrator of SBA’s Office of Entrepreneurial Development, signed the agreement at the Maryland Procurement Technical Assistance Center, a DOD-funded office in College Park, Maryland. (U.S. Department of Defense December 7, 2022 l DOD News)

There are over 90 Procurement Technical Assistance Centers throughout the US. These centers are set up to work with small businesses looking to obtain contracts with either DOD or other federal agencies. The centers are currently going through a rebranding and will move from Procurement Technical Assistance Centers to APEX Accelerators. The goal of the APEX Accelerators is to increase the number of businesses able to participate in the government marketplace. (ibid)

“One of the things that we want to make sure that we’re doing is providing resources and support to small businesses who are looking to do business with DOD, with other federal agencies, with state and local government and really reduce barriers to entry,” said Mitha. “And we can’t do that without our APEX Accelerators. And we can’t do that without a … strong partnership with the Small Business Administration and the [Small Business Development Centers] program.”  (ibid)

At the signing, Madrid said, “Today was about breaking down silos and working together because we’re all in it for the same reason. If you look at DOD [and] SBA, you look at the APEX Accelerators, you look at our SBDC network, we’re all trying to make government, and ultimately opportunities, more accessible to our small businesses at the end of the day. That’s what we achieved today.”  (ibid)

As a result of the MOU, Madrid is certain the DOD and the SBA will find many ways to better integrate training conducted by their APEX Accelerators and SBDCs. Their goal is to jointly conduct at least one national event a year together. (Executive Gov December 9, 2022)

SBA and DOD also launched a joint effort, called the Small Business Investment Company Critical Technologies Initiative, to drive investments in critical technologies that are key to national security. (ibid)

Are you looking to take advantage of one of the more than 90 APEX Accelerators resources and or the Small Business Investment Company Critical Technologies Initiative (SBICCT)? Give us a call.

The Department of Defense is making Small Business their business

The Federal Register recently posted a request for comments which stated, “The participation of dynamic, resilient, and innovative small businesses in the defense industrial base is critical to the United States’ efforts to maintain its technological superiority, military readiness, and warfighting advantage. The department seeks public input on the barriers that small businesses face in working with the department. This input will be used to update the department’s Small Business Strategy led by the Department of Defense (DoD) Office of Small Business Programs.” (Nextgov September 15, 2021)

DoD is looking to reinforce President Biden’s executive orders supporting underserved communities while promoting American competition. Some specific areas of exploration are:

  • What regulations or business practices hinder the relationship between small businesses and the government?
  • How do the department’s initiatives (The Mentor-Protege Program, Indian Incentive Program, Procurement Technical Assistance Centers, the Rapid Innovation Fund, Small business Innovation Research and Small Business Technology Transfer), support or impact small businesses?
  • How do contracting timelines impact small businesses?
  •  Are skilled workforces attainable to “sustain a competitive small business ecosystem?”
  • How the coronavirus pandemic has impacted small businesses in the defense industrial base. (ibid)

At a recent Pennsylvania Showcase on Commerce, Defense Deputy Secretary Kathleen Hicks said, “over the past decade, small businesses in the defense industrial base shrunk by over 40%. The data shows that if we continue along the same trend, we could lose an additional 15,000 suppliers over the next 10 years.” She noted that the department is committed to making it more straightforward for small businesses to win contracts and referenced the Request for Comments notice in the Federal Register.

President Biden is “committed to nurturing small businesses that have faced historic barriers in rural and urban America, including businesses owned by veterans, women, and people of color-especially Black, Latino and Asian American businesses.” President Biden’s goal is to double the number of federal contracts awarded to small and disadvantaged businesses, in the next few years.

The Department of Defense is looking for input by October 25, 2021, to their Request for Comments. If you have questions about the RFC or are looking to work with the DoD or other government agency, give us a call.

 

 

Will the CARES Act become permanent?

In March of 2020, when the Coronovirus became a pandemic, Section 3610 of the CARES Act went into effect. This section of the CARES Act provides economic relief to contractors so that they can continue to pay their employees. Unless Congress extends Section 3610 of the CARES Act, it expires on September 30, 2021. (Washington Technology August 5, 2021)

The Professional Services Council (PSC) would like for Section 3610 to become permanent. PSC Executive Vice President David Broome feels Section 3610 should become permanent. He reasons this by looking at how several agencies have heavily relied on Section 3610 during the pandemic. GAO saw a combined $882.8 million in reimbursements from across the Departments of Defense, Energy, Homeland Security, and NASA. (ibid)

GAO staff interviewed 15 contractors and 12 agreed that Section 3610 “had a great or moderate effect on their ability to retain employees, in particular those with specialized skill or clearances.” (ibid)

According to Broome, “GAO makes the case for establishing a permanent stand-by authority that would be available when needed and in place when the next emergency happens – be it a pandemic, a cyberattack or natural disaster. Establishing this authority now would be a prudent step to implement one lesson learned from the COVID-19 pandemic and ensure that the government and contractors are prepared for the next one.” (ibid)

Are you a contractor trying to take advantage of Section 3610 and not sure where to start? Give us a call.

 

Small Business? Better be able to prove it

The Small Business Administration has contracting assistance programs, in place, to help small businesses by limiting competition for certain government contracts. Additionally, they work to ensure at least 23 percent of all federal contracting dollars goes to small businesses. (JD Supra August 13, 2021)

The current SBA programs are:

  • The small business set-aside program
  • 8(a) Business Development (8(a)) Program)
  • Service-Disabled Business (WOSB) Program
  • Historically-Underutilized Business Zone (HUBZone) Program (ibid)

It has come to light that some of these programs have had issues certifying and monitoring participants of the programs. Recently, two inspectors general audited the HUBZone and SDVOSB programs. The audits showed 15 of 39 firms receiving HUBZone certification and a HUBZone contract. Of the 15, three were improperly certified to participate in the program. The SBA had not made an eligibility determination for four others participating in the program. (ibid)

The Department of Defense (DoD) Office of Inspector General (DoD-OIG) recently issued a report that turned up concerns with how DoD confirms eligibility for SDVOSB contract awards. In the report, 29 SDVOSB contractors were audited. 16 contractors at issue received 27 contracts, together with values at $827.8 million. Those 16 contractors “did not have a service-disabled veteran as the owner and the highest-ranking officer of the company or whose publically available information and contract documentation did not support that the contractor met the requirements for SDVOSB status.” (ibid)

Since the issues have come out, both criminal and civil enforcement has increased. There have been four federal indictments or guilty pleas from business owners who misrepresented their status as a small business, women-owned business, service-disabled veteran-owned business, or minority-owned business. These are all clear-cut cases of misrepresentation and fraud. Recently, a construction company obtained $250 million in government contracts set aside for SDVOSBs. The owner of the company put a disabled veteran as the apparent owner of the construction company to qualify the company as an SDVOSB. The true owner turned out to be a non-service-disabled business partner who controlled both the financial and operational control of the company. This type of fraud is known as a “rent a vet” scheme. (ibid)

The government may use the False Claims Act (FCA) (31 U.S.C 3729-3733) to root out contractors who violate small business compliance laws. The FCA has a whistleblower aspect allowing for whistleblowers to obtain a percentage of the government’s recovery from a successful resolution of the matter. The FCA is a civil enforcement statute that does not require specific intent to defraud. The reach of the FCA is broad and not to be taken lightly. (ibid)

In 2020, there were 8 key settlements, rulings, and filings regarding various small business fraud scheme allegations and five settlements in 2021 already. Just last month a Virginia-based consulting group and the president of the company agreed to pay a $4.8 settlement regarding FCA allegations. The recent civil enforcement should be a flashing light of warning to small business government contractors that inspectors general and the DOJ are actively pursuing contractors who know their actions are in violation of small business contracting rules. (ibid)

To stay compliant and reduce risk, the following guidelines should be followed:

  • Establish a company culture of compliance, with every employee understanding the rules
  • Work with subject matter experts to stay informed
  • Continuously verify the company eligibility in the program
  • Assess the eligibility of subcontractors or affiliates
  • Perform comprehensive and thorough compliance risk assessments (ibid)

Following the guidelines will allow small businesses to spend their resources on participating in government contracts and not on criminal/civil violations.

Trying to determine if you meet the guidelines? Give us a call.