but i’m not a minority and i’m not disadvantaged…how can i...
TRANSCRIPT
De-mystifying Small Business Size
Categories and How They Apply
But I’m not a minority and I’m not disadvantaged…how can I be a Small Business?
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2017
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De-mystifying Small Business Self-Certification
How can I be a small business?
• Many Small Businesses miss out on opportunity to participate in Federal and other government contracting
• Misunderstanding of what qualifies as Small or Minority business and that:o Business Size (Federal contracting) determined by
Revenue or Number of Employeeso Formal SBA Certification documents are not required
Except for HUBZone, 8a, and ANCo Many categories of Small Business don’t require
certification through a third party, including SB, SDB, WOSB, VOSB, SDVOSB
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MINORITY, SOCIAL AND ECONOMIC DISADVANTAGE
MINORITY
• Includes Asian-Indian,
Asian-Pacific, Black,
Hispanic, Native
American Indian,
Alaskan or Hawaiian
Native
• business is at least 51%
owned or 51% of the
stock* is owned
(*publicly traded firm)
• management and daily
operations are controlled
by those minority group
members
SOCIALLY
DISADVANTAGED
Can demonstrate
• Personal experiences of
substantial and chronic
social disadvantage as a
result of subjected to
gender bias, racial or
ethnic prejudice or
cultural bias
• Negative impact on
entrance into the
business world or
advancement in the
business world because
of the stated
disadvantage(s)
ECONOMICALLY
DISADVANTAGED
• Also Socially
disadvantaged
• Ability to compete
impaired by diminished
capital and credit
opportunities
• Assets cannot exceed
$4 million
• Personal income cannot
exceed $250,000,
averaged over 3 years
• Adjusted net worth must
be less than $250,000
SOURCES:
U. S. Small Business Administration - https://www.sba.gov/content/minority-owned-businesses;
https://www.sba.gov/content/economic-disadvantage-eligibility; https://www.sba.gov/content/social-disadvantage-eligibility
National Minority Supplier Development Council - http://www.nmsdc.org/mbes/what-is-an-mbe/
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U. S. Small Business Administration
SMALL BUSINESS – FEDERAL CONTRACTING
A Small Business Concern is:• Independently owned and operated,• Organized for profit• Is not dominant in its field• Depending on the industry, size standard eligibility is
based on the average number of employees for the preceding twelve months or on sales volume averaged over a three-year period. (North American Industry Classification System (NAICS)
SBA ties the description of the product or services described by NAICS to either:
• Average number of employees in the preceding 12 month period, or• Average receipts (revenue) in the preceding 3 year period
When a business calculates their size to determine if they are a small business, they must include the annual receipts and the employees of their affiliates. Affiliation is determined by the ability to control. When the ability to control exists, even if it is not exercised, affiliation exists.
• This is why we ask for the “Total Number of Employees” on our prequalification forms and size certification forms.
• If a company is a “manufacturer” of goods, depending on that number, the business may not be able to be considered small based on the NAICS for their product offering and SBA Size designation for that NAICS
EXAMPLE: 332322 Sheet Metal Work Manufacturing – Size Standard = 500 Employees5
How does the SBA determine a business’s size standard?
SMALL BUSINESS – FEDERAL CONTRACTING
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U. S. Small Business Administration Table of Size Standards
SMALL BUSINESS – FEDERAL CONTRACTING
Manufacturers and Plants – Number of Employees determines size
Services – Revenue determines size
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More boxes mean more value…
The more categories a business can check, the more value you bring to a Prime Contractor with Small Business Subcontracting plan goals.
NAICS Code
Full NAICS Description
Self-Performing Yes or No
Check the box for ALL APPLICABLE Size Categories
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Small Business Types by Socio-Economic Category
SMALL BUSINESS – FEDERAL CONTRACTING
SMALL BUSINESS CATEGORY DESCRIPTION
Small (SB)• Must meet SBA Criteria for Small Business• Can Self-Certify
Small Disadvantaged (SDB)
• Must meet SBA Criteria for Small Business• Considered Disadvantaged Socially and Economically• Can Self-Certify, or• Can Be Certified through Organizations other than SBA (State, DOT, Airport, Minority
Council or other organization(s) [DBE, SDBE, EDWOSB*, WDBE, SMDBE, LSDBE and Others])
8(a) Small Disadvantaged (SDB)
• Must meet SBA Criteria for Small Business• Considered Disadvantaged Socially and Economically as Certified by SBA• CANNOT Self-Certify• Must recertify annually, 9 year program, can only participate 1X
Woman-Owned (WOSB)
• Must meet SBA Criteria for Small Business AND is 51% owned/controlled by woman/women
• Can Self-Certify• SBA has separate certification (not mandatory) for WOSB and EDWOSB*
Historically Underutilized Business Zone(HUBZone/HUBZ/ HUB)
• Must meet SBA Criteria for Small Business AND Principal Office in designated HUBZone• 35% or more of employees live in a HUBZone• CANNOT Self-Certify• For Federal contracts certification only through SBA accepted• State Certification acceptable for State, County and Municipal contracts
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Small Business Types by Socio-Economic Category
SMALL BUSINESS – FEDERAL CONTRACTING
CATEGORY DESCRIPTION
Veteran-Owned (VOSB)• Must meet SBA Criteria for Small Business• 51% Owned/Controlled by Veteran(s) as defined in 38 USC 101(2)• Can Self-Certify
Service Disabled Veteran-Owned(SDVOSB)
• Must meet SBA Criteria for Small Business• 51% Owned/Controlled by Service Disabled Vet or Qualified Caregiver when severely
disabled• With 0% - 100% service-connected disability as defined in 38 USC 101(16) &
documented on DD 214 or equivalent• Can Self-Certify
Alaskan Native Corporation (ANC)And Tribal Corporations
• Must meet SBA Criteria for Small Business• CANNOT Self-Certify “Tribal Status”: Must provide documentation. Contact the SBA
Office of Native American Affairs for assistance.• Can Self-Certify SDB Status – NOTE: In practice, the SBA has not required that Tribal
members demonstrate that they qualify as “economically disadvantaged,” as these terms are defined only to SBA to manage an 8(a)
Historically Black Colleges & Universities(HBCUs), andMinority Institutions (MIs)
• HBCUs and MIs are normally not organized for profit, so they cannot be considered small businesses in accordance with SBA’s regulations (13 CFR 121.105); HOWEVER,since our contracts are with the Department of Defense (USACE, NAVY, etc.) or if they were with NASA, or the Coast Guard, HBCUs and MIs are counted as small disadvantaged businesses (SDBs)
• CANNOT Self-Certify – Should be documented with the Department of Education as an HBCU or MI
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Why is size standard important to Kirlin Builders?
SIZE MATTERS
Kirlin Builders (KB) demonstrates good faith effort in accordance with FAR 52.219-8 – Utilization of Small Business Concerns, and 52.219-9 – Small Business Subcontracting Plan as follows:
• On a contract-by-contract basis, providing records to support award data to the Government, including the name, address, and business size of each subcontractor
• Written representations by our subcontractors regarding their status as a small business concern
• Receiving evidence of SBA Certification by providing copies of award letters for:• HUBZone certification and renewal – every 3 years• 8a Business Development Program certification and renewal, annually
for 9 years
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Why is size standard important to Kirlin Builders?
SIZE MATTERS
KB provides notice to subcontractors of penalties for misrepresentation of business size as small (all categories) when they are trying to obtain a subcontract (from KB) that is to be included as part or all of a goal contained in our subcontracting plan.
The United States Government can impose a penalty against a firm misrepresenting their business size and/or disadvantaged status. These penalties include but are not limited to:
(1) Punished by imposition of a fine, imprisonment or both;(2) Administrative remedies prescribed by the Program Fraud Civil Remedies Act of 1986
(31 U.S.C. 3801-3812);(3) Suspension and debarment as specified in subpart 9.4 of Title 48, CFR (or any
successor regulation); and(4) Ineligibility for participation in programs conducted under the authority of the Small
Business Act of 1958 (15 U.S.C. 611 et seq.) for a period not to exceed 3 years.
Any Prime Contractor who knowingly allows a sub who has misrepresented its’ size in a bid for work for the Government is also subject to these and other penalties, including monetary penalties.
THANK YOU!You are a critical part of our success!
Here to help:
Lisa C. King
Administrator
Contracts and Small Business
301.315.7441
Internal – [email protected]
Subcontractors – [email protected]
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