the matchmaker’s small business training an approach to government and prime contractor...

The Matchmaker’sSmall Business Training

An approach to Government An approach to Government and Prime Contractor and Prime Contractor

SubcontractingSubcontracting

The MATCHMAKERS HPT is a The MATCHMAKERS HPT is a Subcommittee of the Northeast CouncilSubcommittee of the Northeast Council 2009 Revision

Small Business Development Training

Today’s Agenda:

• Introduction Why Sell to the Government• Module I Key Qualifications• Module 2 Federal Acquisition Process• Module 3 Rules of the Road • Module 4 Small Business Goals• Module 5 The Government Solicitation• Module 6 Marketing to the

Government and Prime Contractors

Why Sell to the Government?• The United States Government is the

largest buyer of goods and services in the world.– Reliable customer– Open competition– Small Business Programs

• State and local governments are a very large marketplace.– May be less cumbersome than Federal

Regulations– Regional preferences may exist

Government Subcontracting

Govt Contract

Prime Contractor

Subcontractors

Sub Tier Contractors

Over $500 Billion Dollars

Over 300 Billion

Remaining approximately $160 billion is reported in simplified acquisitions, P Cards, Inter Agency Purchases and Micro Purchasing

How Can Small Businesses Participate?

• The Federal Government buys from small businesses

$100 Billion each year is contracted to small businesses

33% supplies/

equipment

32% of services

7% of

construction

13% of R&D

How can a small business compete?

– Congressional mandates to set aside contracts for small business

– Federal Acquisition Regulations (FAR) level the playing field– Resources dedicated to small business

How do I know I am ready to sell to the Federal Government?

• Critical Success Factors

– Financially stable/adequately capitalized– Demand for your product or service– Adequate time to devote to Government

contracting– Pricing and past performance

Small Business TrainingSmall Business Training

Module 1:

Key Qualifications for Small Business

Module 1: Key Qualifications for Small Business

• How to Determine if your Business is Small

– The Small Business Administration (SBA) has established size standards based on your industry

– 37 categories based on North American Industrial Classification System (NAICS) Codes

– Details can be found at www.sba.gov/size


• Government Agencies or Prime Contractors will need to know who and what you are

Have your answer ready:

– Clearly define your product or service

– Clearly define your capabilities

– Know your small business category


• Small Business Categories– Small Business (SB)

• Small Disadvantaged Business (SDB)* & 8(a)

• Woman-Owned Small Business (WOSB)

• Historically Underutilized Business Zone (HUBZone)

• Veteran-Owned Small Business (VOSB)

• Service-Disabled Veteran-Owned Small Business (SDVOSB)

* The SBA suspended SDB Certification 09/23/08

• The Small Business must be 51% owned and operated by the individual(s) who qualify for any categories.

For Example: – a "woman-owned business" is a business that is at least

51% owned by a woman or women who also control and operate it. "Control" means exercising the power to make policy decisions. "Operate" means being actively involved in the day-to-day management.



• SBA Certifications– Confirmation of certification by the SBA is

required by prime contractors and federal agencies to allow them to receive credit for purchases made to SDB*, 8(a) and HUBZone firms.

– All other small business categories may self-certify.

• The certification process– Contact your state PTAC or visit www.sba.gov

for more information on how to apply for certification.

* The SBA suspended SDB Certification 09/23/08


Step 1:• Register on Central Contractor

Registration (CCR)• www.ccr.gov • Mandatory for all current & potential federal

vendors• Creates a Commercial and Government Entity

(CAGE) Code that identifies your business within the federal purchasing/ payment system


• To register for CCR, you will need: – D&B DUNS Number: 1-800-333-0505 – SBA Certification

• For SDB* and 8(a) Status: www.sba.gov/sdb

• For HUBZone Status https://eweb1.sba.gov/hubzone/internet/

• All other SB categories can self-certify

– To renew annually by accessing your information with your DUNS # and CAGE Code and utilizing your Personal User Account ID and Password

• User Password expires and requires revision every 60 days


Step 2: • Register at On-line Representations and Certifications Application

(ORCA)– https://orca.bpn.gov/– Creates a single place for your small business representation &

certification info– Eliminates entering data with each bid/proposal (update annually)

• Examples: Debarred? Woman Owned? TIN? Affirmative Action?


Step 3:• Get Informed

– Understand the Federal Government contracting process

– Find opportunities

– Learn the rules

– Learn how to prepare a bid

– Learn how to perform on contracts

– Learn how to build on success


• There are several sources of information and assistance:

– The PTAC office in your state or region

– The SBA – Small Business Development Centers

– Small Business Liaison Officers (SBLO) at prime contractors

– Small Business Specialists at Federal Agencies


Step 4:• Develop a Marketing Plan

– Prime Contractor – Subcontractor– Both?

• Does the Federal Government buy my product or service?

• Do prime contractors buy my product or service?

Only research will tell!


• What you need before you pursue government contracts/subcontracts

– Adequate capitalization– Drive, determination, & patience– Competitive advantage– Demand for products/services– Adequate Pricing and margins– Effective quality system– Current business plan– Bonding, insurance and security clearance (if

required)– Computer Literacy, Internet capacity

KNOW YOUR CUSTOMER!


Module 2: The Federal Acquisition Process


• Federal Acquisition Process differs from commercial purchasing– Highly regulated– Open and Fair Competition– Contract clauses are “take-it-or –leave-it”– Specifications are stringent– Government may cancel for cause or convenience– Mandated socio-economic programs– Penalties for noncompliance– Subject to Government audit


• What is the Federal Process?

Pre-award- Determination of Need- Analysis of Requirement- Source Selection

Solicitation & Award- Solicitation- Evaluation- Negotiation - Award

Post-award- Performance of Work- Payment & Accounting- Modification- Closeout- Termination


• Types of government solicitations

– Simplified Acquisitions

– Sealed Bidding

– Negotiated Procurements


• Simplified Acquisitions– Account for 90% of purchase

transactions

– Purchases less than $100 K

– Commercial items less than $5 million

– Reserved for small business if purchase is above $3,000

– Micro purchases less than $3,000• 85% of Government purchasing actions


• Sealed Bidding– A rigid procurement process

– Not open to negotiation

– For non-commercial supplies or services greater than $100K

– Clear and detailed specifications

– Awarded on price factors

• But also to responsive/responsible bidders only


• Negotiated Procurements– Most flexible but most complicated procurement method– Many forms– 80% of contracts exceeding $100K– Requests for Proposal (RFPs)– Evaluation criteria cited in solicitation– Contracting Officer (CO) may negotiate


• Electronic Procurement Opportunities Examples:– Federal Business Opportunities (FBO) is the

electronic, government-wide portal for federal procurement opportunities that exceed $25,000

– http://www.fbo.gov

• DLA Enterprise Support– RFQ, RFP, and award postings from the

Defense Supply Centers– http://www.dla.mil/dss/default.asp


• Getting Paid

– Prompt Payment Act (FAR Subpart 32.9)

– Government invoice payment is the 30th day after the designated billing office receives a proper invoice from the contractor or receipt of goods or services –whichever is later (exceptions FAR 32.904)

– Electronic funds Transfer (EFT)


• Purchase Card (P-Card) program

– Purchases of individual items under $3,000 or multiple items with an aggregate under $3,000 ($2,000 construction) are considered micro-purchases

– Micro-purchases do not require competitive bids or quotes, and agencies can simply pay using a Government Purchase Card (credit card), without the involvement of a procurement officer as long as the price is deemed fair and reasonable


• GSA Schedules Program– Method of simplified acquisition – helps federal

buyers purchase faster, easier, at lowest prices– GSA establishes government-wide contracts with

vendors to provide commercial supplies and services – Generally 5 years with three 5 year option periods of

indefinite delivery & indefinite quantity (IDIQ)– Not a guarantee of sales! Contractors must market

themselves– www.gsa.gov/schedules


MODULE 3: Rules of the Road

Module 3: Rules of the Road

Federal Contract LawOther Laws that Affect Contracting/ Dealing

with Government

Federal Acquisition Regulations (FAR)http://farsite.hill.af.mil

Agency Specific Regulations (DFARs, etc.)http://acquisition.gov/comp/virtual_library/regs.htm

Your solicitation and contract


• FAR (Brief Outline/ Highlights)

– Subchapter A – General (Parts 1-4)• Part 2 Definitions• Part 3 Ethics/ Conflicts of Interest

– Subchapter B – Competition (Parts 5-12)• Part 6 Competition Requirements• Part 8 Required Sources• Part 9 Contractor Qualifications


• Subchapter C - Contracting Methods and Contract Types (Parts 13-17)– Simplified acquisition, sealed bidding, contract by

negotiation, types of contracts, special contracting methods

• Subchapter D - Socioeconomic Programs (and other laws affecting contracts)– Part 19 Small Business Program– Labor laws, other laws, privacy, FOIA, Buy

America, foreign acquisition, other special cat. programs


• Subchapter E - General Contracting Requirements (Parts 27-33)– Patents, data & copyrights, bonding, insurance,

taxes, cost accounting standards, contract cost principals & procedures, contract financing, & protests, disputes and appeals.


• Subchapter F - Special Categories of Contracting (Parts 34-41)– Major system acquisition, R&D,

construction/arch./engineering, service contracts, federal supply schedules, IT, & utilities

• Subchapter G - Contract Management (Parts 42-51) – How relationship is managed– Admin.&audit, modifications, subcontracting, Govt.

property, QA, transportation, value engineering, termination, extraordinary actions, & use of govt. sources


• Subchapter H – Clauses & Forms– Part 52 Solicitation Provisions

and Contract Clauses– Part 53 Forms


• Other areas of interest

– Transfer of technology with foreigners

– Security clearances– Government ethics/

conflicts of interest– Making claims against the

government


• Requirements for government contracting and subcontracting

– The flow down requirements and/or statement of work in a prime contract may require the small business subcontractor to make organizational adjustments to reduce the risk of non-performance

– Examples: quality, accounting systems, security


• Do I need a lawyer/other professional to understand all of this stuff?

Probably not, but it depends• Scale/ complexity of the deal• The scope of what you are

putting at risk• Novelty of the deal


• Free assistance vs. paid assistance

– You have free help out there, but it can realistically take you only so far.

– If successful, you need to purchase talent, either in-house or consultant.

– Be an educated consumer.


MODULE 4: Small Business Goals

Module 4: Small Business Goals

• Public Laws and their impact on small business– A series of Public Laws govern the small business

contracting goals of Federal agencies as well as the sub-contracting goals of prime contractors

– Commonly referred to as “set-aside programs” and “subcontracting plans”

– Reality: Goals are treated like requirements and are dependent on the availability of qualified small business firms


• Socioeconomic Goals that Affect Competition (examples)– Use small business (FAR Part 19)– Pay prevailing wages (FAR Part 22.10)– Provide employment opportunities for U.S. citizens

(FAR Part 25)– Equal employment opportunity (FAR Part 22.8)– Maintain a drug-free workplace (FAR Part 23.5)– Provide preferences for veterans (FAR Part 22.13)– Provide handicapped accessibility (FAR Part 22.14)


• Government agency, prime contractor, and small business relationships

– Large prime contractors with contracts > $550K are required to submit small business subcontracting plans to the Government

– Prime contractors negotiate goals in those plans and are monitored by review of bi-annual reports (SF294/SF295)

– No “privity of contract” exists between the

subcontractor and the buying agency


• Preferences for small business

– Small businesses in certain categories can receive some preference as a prime contractor, when the small business capability meets the procurement requirements identified in the solicitation

– Small businesses help Government agencies and prime contractors meet their small business goals

Federal Government Small Business Contracting Goals

• Small Business 23%

• Women Owned SB 5%

• HUBZone 3%

• SDB 5%

• 8a 5%

• Service Disabled Vet 3%

• Veteran Best Effort

0 %

5 %

1 0 %

1 5 %

2 0 %

2 5 %

S m a l l B u s i n e s s

S m a l l B u s i n e s sW o m e n O w n e dH U B Z o n eS D B8 aS e r v i c e D i s a b l e d


• How does a small business market itself to the agencies and prime contractors?

– All Government agencies and large business primes have goals to be met, but…

– Your SB category should not be the primary focus of your marketing pitch

– Your SB category may help get you in the door, but…

– Your ability to perform is most important


Module 5: The Government Solicitation

Wanted


• Solicitation/Contract elements

UCF = Uniform Contract Format

A. Solicitation/Contract FormB. Prices/Costs C. Specifications/Statement of Work D. Packaging & Marking E. Inspection & Acceptance F. Deliveries or Performance

G. Contract Administration DataH. Special Contract RequirementsI. Contract ClausesJ. List of AttachmentsK. Representations, CertificationsL. Instructions to Offeror

M. Evaluation Factors for Award


• Successful Proposals

– Responsive, all elements of the solicitation addressed and followed

– Responsible – demonstrates capability

– Competitive pricing

– Organized and concise


• Evaluate your proposal

– Meets all elements of the solicitation?

– Supporting documentation is available?

– All certifications and required documents are signed and included?

– Submitted in accordance with solicitation instructions and evaluation criteria?

– Does your program plan meet the requirements and is it executable?


• Resources for Small Business

– PTACs (http://www.aptac-us.org)– Prime Contractors’ SBLOs– Federal Agency Small Business Specialists

(http://www.osdbu.gov/)– US Small Business Administration (

www.sba.gov)– Northeast Regional Council

http://www.dodneregional.org/news.htm


Module 6: Marketing to Federal Agencies and Prime Contractors


• Preparing to market to federal agencies and prime contractors

– Obtain a D&B DUNS (Data Universal Numbering System) number

– Register in CCR (Central Contractor Registration)– Determine correct NAICS (North American

Industry Classification System) code


• Identifying potential customers

– Visit Fedbizopps at www.fbo.gov– Visit subnet at

http://web.sba.gov/subnet/search/index.cfm– Contact local PTAC or SBA – Research Federal agency websites– Research past awards– Contact prime contractors for subcontracting

opportunities– Attend outreach events– Attend Matchmaker events


• Small Business Research & Development Programs ($$$)– Small Business Innovative Research

(SBIR) programs– Small Business Technology Transfer

(STTR) program– Defense Advanced Research Projects

Agency (DARPA)– Broad Area Announcements (BAA’s)– Other Federal agencies’ R&D programs


• GSA – General Services Administration– Expedited procurement system

developed by GSA and used by many Federal agencies for the procurement of goods and services (State agencies may use for Information Technology)

– Acquisition priority over full solicitation when applicable

• For more information: – GSA Boston at 617-565-8100– www.gsa.gov/schedules


• Is the Federal agency or prime contractor really your customer?– Do research to determine the following:

• Are your products/services being purchased by Federal agencies or prime contractors?

• Are you able to compete profitably?• Do you understand Government contracting

procedures?• Is the pace of Government contracting compatible

with your business plan?• Can a preference program benefit you?


• Summary

– Identify your target agencies and contact the Small Business Specialist

– Contact the SBA Procurement Center Representative www.sba.gov/gc

– Contact your local PTAC– Contact prime contractor SBLOs (Small

Business Liaison Officers)– Attend Matchmaker and Outreach events– Be persistent in your follow-ups

Important Information The material presented in this training and the advice given

by the trainer are intended to give you things to think about as you prepare to be a government contractor. The materials are not intended to be a substitute for the actual laws, regulations, procedures, policy and directions governing your relationship and conduct with the government or its contractors or agents. Not only are things subject to constant revision, they may also be subject to interpretation that only a competent authority or professional can provide. Do not rely on this presentation as an authority. Please read the most current law, regulation, procedure, policy, direction or contract language and if there is any question as to what it means, seek clarification from a competent authority in the government or seek the help of a competent professional.

*Nothing in this presentation should be construed as a guarantee of a contract award.

The Department of Defense Northeast Regional Council

for Small Business Education and Advocacy

http://www.dodneregional.org/news.htmVisit us Often!

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2009 Revision

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