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Tag: prime contractor

Why the Small Business/Large Contractor Union is a Good Thing

The Biden Administration continues to focus on small businesses providing services to the federal government. This benefits not only small businesses but large contractors, as well. When large contractors partner up with a small business, it’s a win-win for both.

Federal agencies have stepped up their focus on contracting with small businesses to meet their small business contracting goals. The Small Business Administration recently reported $154 billion spent on contracts with small businesses in fiscal year 2021. In 2021, 27.2 percent of total federal contracting awards were to small businesses. This surpassed the 23 percent White House goal. (Washington Technology February 2, 2023)

Unfortunately, the past several years have seen the number of actual small businesses trend downward. The good news, there is more money for fewer small businesses that can serve as prime contractors due to limitations on the services these small businesses can offer. (ibid)

Large government contractors working with small businesses are looking like the future of federal contracting. These partnerships, which are built on mutual trust, allow for increased skills and innovative thinking. Additionally, when large contractors bring in small businesses, new jobs are created, entrepreneurship is expanded and innovation is at the forefront. (ibid)

According to Thomas A. Duckenfield III, CEO of TDB Communications, a service-disabled, veteran-owned small business, and an 8a firm, “the best partnerships between small business and large contractors are based on a shared culture and alignment. There is no one-size-fits-all approach to these relationships. It’s about developing partnerships that benefit both parties while establishing trust between the two companies to better serve federal agencies and their constituents.” (ibid)

When large businesses work with small businesses it creates opportunities, cultivates new ideas, and introduces the latest technologies. For these partnerships to work both parties must understand what each brings to the “communal table.” Skills and capabilities must provide complimentary support and additional capacity for federal agencies. (ibid)

There is no set formula for partnership success. Companies that support each other’s business and goals as well as those of the federal agencies they serve should work well together.

Are you looking to partner with a small or large business on a federal agency contract? Give us a call.

Federal contractors minimum wage reset

Federal contractors enjoyed a minimum wage raise on January 1, 2021. This was the first increase since President Obama was in office. Even so, on April 27, 2021, President Biden signed EO 14026, raising the hourly minimum wage to $15 ($10.50 for tipped workers.) The United States Department of Labor published Field Assistance Bulletin (FAB) No. 2022-1 clarifying the requirements of EO 14026. (JD Supra January 17, 2022)

The four categories of contracts covered are:

  • Procurement contracts for construction covered by the Davis-Bacon Act (DBA).
  • Service Contracts covered by the Service Contract Act (SCA).
  • Concessions contracts.
  • Contracts entered into with the Federal Government in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public. (ibid)

The FAB includes all 50 states, Washington DC, Puerto Rico, and the Virgin Islands. It also includes the Outer Continental Shelf Lands as defined in the Outer Continental Shelf Lands Act, American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, Wake Island, and Johnston Island. (ibid)

EO 14026 covers workers whose wages are governed by the FLSA, SCA, or DBA and are employed on or in connection with a covered contract. (ibid)

In addition to the increase in minimum wages, the FAB supplies information on worker notice requirements, subcontractor requirements, recordkeeping requirements, and anti-retaliation provisions and remedies. The FAB also requires contracting agencies to incorporate all applicable EO contract clauses into covered prime contracts and flow down to subcontractors’ contracts. (ibid)

Questions about the Field Assistance Bulletin (FAB) and its requirements? Give us a call.

How to find the perfect partner – in government contracting

The government contracting arena is not only tough to navigate but also highly competitive. Many businesses turn to business partnerships to better align their products and services to meet the requirements of the government. While there are many forms of business partnerships, the most common are subcontracting, joint ventures, and contractor team arrangements.

Subcontracting is the most popular form of partnership in government contracting. Generally, a prime contractor (possibly with an established government presence) looks for a small business entity to assist with a government contract. This type of partnership works particularly well for a small business trying to “break” into government contracting. Govconwire December 20, 2021

Another form of partnership is a joint venture. This is when a small business especially those under the Small Business Administration’s mentor-protege program form a partnership to execute specific tasks within a government contract. Small businesses will integrate their specific skills to perform under contract guidelines. (ibid)

The third type of partnership is the contractor team arrangement (CTS). This is when two or more businesses, all with GSA Schedule contracts, come together to work on very specific government contracts. (ibid)

There are several ways to meet prospective partners. There are government contracting events, sponsored by businesses and on occasion, the government. Government websites, also publish various subcontracting opportunities, such as eLibrary, SubNet, the SBA Directory of Federal Government Prime Contractors with a Subcontracting Plan, and the Department of Defense’s Subcontracting Opportunity Directory. (ibid)

Being prepared when pitching a potential business partner is the most effective way to learn whether or not the partnership will work for both parties. Knowledge of your potential partner is key, company background, products and services offered, benefits to both parties, and a product demonstration all help to determine if the businesses are the right fit to work together. (ibid)

It can be hard to know if two companies are right for each other. One way to determine a good fit is to work on a project together before heading into the government arena. Look at their performance under pressure. Did they handle expectations well? Did the pressure cause hiccups in performance? Did communication take place or were there bottlenecks? These are just a few questions to be answered when determining whether a business relationship will be positive as well as productive. (ibid)

Finally, is there a commitment from both parties? Like any lasting, strong relationship, there must be dedication on both sides to make the partnership work.

Struggling to get your first government contract? Looking for a business to partner with? Give us a call.

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The Navy is looking to end Small Business subcontractor baiting

The Department of the Navy (DoN) has exceeded all of its small business goals for fiscal year 2021, spending more than $17 billion with small business prime contractors. The Navy is, however, wrestling with small business subcontractors getting their fair share. (Federal News Network October 21, 2021)

An updated effort to enforce small business contracting plans is in the works, according to Jimmy Smith, the director of the Office of Small Business Programs for the Department of the Navy. (ibid)

According to Smith, “the Navy executed a Navy audit, service audit on subcontracting on our 10 major buying commands. The Naval Sea Systems Command was the first of those 10 audits. The audit has concluded. We’ve already seen the results of that and now we’re sharing that information across the entire enterprise to go off and correct problems. We don’t think we’re going to learn anything more from going over the same information in the other audits, so now is the time to get into corrective actions and the steps that we need in order to execute solutions to problems instead of continuing to admire problems.” (ibid)

The first audit has provided some changes to be made Navy-wide, according to Smith. “First is reporting back to our industry partners. We have to make that something that’s pretty standard, maybe use a machine learning technology to help contracting officers identify problems that are in contractor performance assessment reporting (CPARs) when it comes to how well our industry partners are doing meeting their own subcontract and goals, that they can communicate it to us. We would love to have a system that flashed bright red lights when an industry partner wasn’t living up to the plan in the document that they provide to us about the health of their effort. Right now, it’s all hand-over-hand reading to see if you find that someone is off and then go do the analysis. I think we have to come up with a mechanism that brings the importance level of subcontract and compliance up to a higher level to raise it to the attention that it’s deserved.” (ibid)

Government agencies and prime contractors, need to hold up their side of the bargain and be held accountable. In 2018, the Inspector General for the Defense Department found it to be a challenge for five contracting commands to monitor prime contractors’ compliance with individual subcontracting plans. He told the House Small Business Committee the individual contractors who held subcontracting plans, did not meet their small business subcontracting goals. (ibid)

The Federal Acquisition Regulations Council issued a final rule in August. The rule requires large businesses to make “good faith efforts” to meet subcontracting goals. A few examples of actions that are a failure to make a good-faith effort can be found in the SBA’s guidance list. (ibid)

The final rule spells out what encompasses not making a “good faith effort”. The rule includes turning in subcontracting plan reports late, not designating an employee to monitor the subcontracting plan, and not completing market research. (ibid)

Smith said the Navy has met all of its small business goals for the past four years. He added, the Navy’s goals are not just the numbers, but providing the correct capability to the warfighter at the best value. (ibid)

Smith noted that the Navy is finding small businesses that meet their needs by an extended outreach effort. The move to virtual events has also extended their outreach. Virtual events are more cost-effective and reach more people. Smith plans to continue to do some live events, however, webinars will complement these and hopefully reach even more small business contractors. (ibid)

Questions about your small business subcontract plan? Give us a call.