15% Goal for Small Disadvantaged Businesses

When it comes to Diversity, Equity, and Inclusion (DE&I) the Biden administration is making good on its promises. The administration issued an executive order rescinding the Trump administration policies that weakened the diversity, equity, and inclusion training programs at agencies and federal contractors. In addition, the Office of Management and Budget issued a request for information (RFI) searching for DE&I solutions to enhance a number of government activities. (Government Executive May 19, 2021)

This particular RFI appears to be a crowd-sourcing application for policy solutions. It shows that the current administration is very serious about DE&I and their willingness to accept changes and an openness to new and different ways of viewing the inner workings of the government. (ibid)

It appears the administration is looking for better ways to leverage the government’s spending capability. To make sure all receive their fair share and to help close the income, wage, and opportunity gaps. The administration has initiated a 15% goal for federal contract dollars to go to small disadvantaged businesses. Although this looks like a great opportunity it is actually quite hard to measure how many dollars actually funnel through prime contractors to their subs. Figuring out how to measure the dollar flow would be a good start, then putting the 15% goal into effect. Progress is measurable at that point. (ibid)

So where are we today? Can the administration succeed with its DE&I goals? The question becomes, “how do we know?” Steps are clearly headed in the right direction, however, a commitment and a baseline are needed to end up where we want to be.

Are you a small disadvantaged business looking into GSA? Give us a call.

 

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.