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Tag: small business

There’s more to a Small Business Affiliation than meets the eye

Small business contracting has been gaining momentum through the Small Business Administration’s (SBA) “all small” mentor-protege program. This program allows a large business to form a joint venture with a small business to compete for set-aside contracts. The SBA has several ways to determine if a company is actually small. And just because you meet the size standard for a procurement does not necessarily mean you are eligible for an award. (Federal News Network January 14, 2022)

Every procurement has a size standard assigned. Size standards set the largest size that a business (including its subsidiaries and affiliates) may be. Therefore, it is crucial to note whether the small business has any affiliates. Size standards are based on the number of employees or average annual receipts of a company. An affiliate’s number of employees and annual receipts are included in business size determination. (ibid)

Many award protests arise when offerors allege the winning company is ineligible, based on size. A protestor will argue that a company is not a small business due to its affiliation with a large company. The affiliation thereby exceeds the size standard. Should the SBA find that a bidding company exceeds the size standard due to an affiliation, the result can be the loss of a contract. (ibid)

Affiliation is when one company controls another company, or a third party controls both businesses. It doesn’t matter if the control is exercised. It only matters that it exists. (ibid)

Common ownership can give rise to affiliation. Common ownership happens when an owner of a firm holds an ownership interest in one or more other firms. This gets complicated if a company is owned by multiple shareholders. (ibid)

Affiliation can occur due to the relationship between the firms themselves, such as an affiliation based on the ostensible subcontractor rule. This rule provides that a prime contractor and subcontractor are affiliated if the subcontractor is performing the primary requirements of a contract and the prime contractor is reliant upon the subcontractor. If the SBA dins an affiliation under the ostensible contractor rule, it is limited to the procurement in question. Both companies may be eligible for award of other small business contracts. (ibid)

The rules around affiliation are subtle and often complicated. Many times a company finds out about an affiliation only after a protest is filed. An unfavorable size determination will result in the loss of a contract. This can affect a vendor’s ability to compete for future set-aside contracts. If this happens, a firm must be recertified as small. It is the same if a protested frim is a protege in a mentor-protege joint venture. The protege must be recertified. (ibid)

Affiliations are preventable. All agreements should include representations concerning the prime contractor’s small business status. All parties should be knowledgeable of the circumstances that may result in affiliation. (ibid)

Do you have affiliation questions? 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 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.

 

 

With modernization comes small business opportunities

On July 29, the Senate passed the Promoting Rigorous and Innovative Cost Efficiencies for Federal Procurement and Acquisitions (PRICE) Act to modernize the federal acquisition process and expand contracting opportunities for small businesses. This legislation encourages the execution of innovative new systems and procedures while allowing small businesses to grow their businesses through federal contracts. (Federal Soup August 2, 2021)

The objective of the Price Act is to address long-standing obstacles facing small businesses attempting to contract with the federal government.  The Act goes so far as to require federal agencies to report on how they plan to improve mission outcomes and increase small business participation in government contracting. (ibid)

The PRICE Act passage directly follows a white house objective to direct $100 billion toward small disadvantaged businesses by expanding federal contracting opportunities. (ibid)

Are you a woman, minority, veteran-owned, or small disadvantaged business with contracting questions or experiencing hurdles that are hard to overcome? Give us a call.

 

 

Money, money, money!

It’s the fourth fiscal quarter for the federal government and that means it’s time to use that budget or risk losing it. The fourth quarter generally holds great opportunities for contractors from July to September as agencies are keen to use up their budgets. (Federal Times August 3, 2021)

During the month of September, federal contract awards account for nearly 16 percent of all contract activity, with 40% of small business spending taking place in the last quarter of the fiscal year. Although not all agencies are the same in how they treat fourth-quarter spending, the State Department and U.S. Department of Agriculture tend to do some of their “big spending” in Q4. (ibid)

COVID-19 spending continues to account for a large share of federal contracting. The heavy COVID spending has changed the spending cycles and thrown them out of balance. This might make the Q4 rush a little less robust than in past years however it remains one of the best times of the year to be well-positioned for contract opportunities. (ibid)

Contractors should have a strategy for getting the most out of Q4 spending, especially from agencies known to rely on it.

Hoping to get the most out of Q4 spending but no strategy in place? Give us a call.