SBA 1st First Wednesday Virtual Learning 2017

SBA 1st First Wednesday Virtual Learning 2017

1 Contracting with HUBZone Certified Small Businesses SBA 1st First Wednesday Virtual Learning 2017 Hosts 2 Dwight A. Johnson, Procurement Center Representative SBA Office of Government Contracting, Area IV, Omaha [email protected] (402) 221-7206 Jan Kaiser, Procurement Center Representative SBA Office of Government Contracting, Area IV, Chicago [email protected] (312) 353-7442 Deborah Crumity, Procurement Center Representative SBA Office of Government Contracting, Area IV, Rock Island

Arsenal [email protected] (309) 782-5734 Welcome to SBA Virtual Learning 2017 3 1. Questions answered during the final 10 minutes. 2. Technical problems: Contact the moderator with a note or call AT&T Connect Support at 1-888-796-6118. 3. Page numbers stated for those working off hard copies of the program. 4. We cover the SBA Quick Reference as time allows. 5. For more SBA training visit the SBA Learning Center website https:// www.sba.gov/tools/sba-learning-center/search/training 4

Association of Procurement Technical Assistance Centers posts past First Wednesday programing Check this link for past programs: http://www.aptac-us.org/for-contracting-officerssba-webinar-library/ Contracting officer resources: How PTACs partner with federal agencies: http://www.aptac-us.org/federal-partners/ Find your nearest Procurement Technical Assistance Center at http://www.aptac-us.org 5 FIRST WEDNESDAY VIRTUAL LEARNING SERIES 2017 SCHEDULE 9:30 to 10:30 Central Time am 0

3 : 0 1 0 3 : 9 to n r u t l Date a FY 2017 Topic Re r

t n e 7 C 1 0 e 2 Non-Manufacturer Rule h t 1 October 5, 2016 f o er d n

i a for rem s2 easNovember on 2, 2016 Market Research: Using FPDS & DSBS 3 December 7, 2016 New All SB Mentor-Protg Program 4 January 11, 2017 SBA Surveillance Reviews 2017 5 February 1, 2017 Certificate of Competency Program

6 March 1, 2017 Historically Underutilized Business Zones 7 April 12, 2017 Govt Subcontracting Compliance 8 May 3, 2017 Woman Owned Small Business

9 June 7, 2017 SBAs Size Program 10 July 12, 2017 Small Business Legislative Updates 11 August 2, 2017 8(a) Business Development The program schedule above is for information only and is subject to change.

Looking for Your Feedback 6 Your input is needed and we are requesting that you respond regarding the following issues Time Change Trial: We conducted a time change trial in DEC JAN FEB and held the First Wednesday training later in the day. Please provide your thoughts about the training and what worked best you and your activity. Calling for Topics for Next Year: Please tell us what topics you would like covered in next years program.

Please respond to the survey BY MARCH 31, 2017 to provide your opinion at: https://www.surveymonkey.com/r/R8CP9RT If your agency prohibits access to the Survey Monkey website send your thoughts to [email protected] One Continuous Learning Point 7 Self-service: Fill in your name on the certificate slide and save. Download the certificate and print for your records. You submit your request for training credit IAW your agency policy, i.e. FAITAS. Phoning in only: If you listen in groups and you want all attendees to be included on the future mailing list, send email addresses of participants in an excel document to [email protected]

CAUTION Do not recommend fee for service (.com) firms for SAM registration 8 1. There are firms that require fee for services to assist small businesses in a variety of ways. Registration in SAM, proposal preparations, certifications (not authorized by SBA) and assistance in getting on GSA Federal Supply Schedules and more. 2. No government official should be promoting any individual business services or products as this implies endorsement of one firm over all others. The government has to remain impartial. If you come across something that you think is great, encourage that firm to market itself, but do not market on their behalf. 3. The government, through the Department of Defense established the Procurement Technical Assistance Program (PTAP) which has centers throughout the country that do provide this and many other services most of which are at no cost to a firm.

Presenters 9 Mariana Pardo, Director HUBZone Program Washington, DC [email protected] Alison Mueller, Attorney Advisor Office of General Counsel Washington, DC [email protected] 10

Contracting with HUBZone Certified Small Businesses Historically Underutilized Business Zone Program 13 CFR part 126 FAR subpart 19.13 Overview 11 1. OVERVIEW 2. HUBZONE SET-ASIDES AND SOLE SOURCE AWARDS 3. SET ASIDE OF ORDERS 4. HUBZONE PRICE EVALUATION PREFERENCE IN FULL AND OPEN COMPETITION 5. LIMITATIONS ON SUBCONTRACTING AND NONMANUFACTURER RULE 12

OVERVIEW SBA Administers the HUBZone Program 13 Status as a HUBZone small business concern (SBC) is determined by SBA, pursuant to 13 CFR part 126 A firm must apply to SBA for HUBZone certification (13 CFR 126.300 to 126.309) If SBA determines that a concern is a HUBZone SBC, SBA will issue a certification to that effect and will add the concern to the List of Qualified HUBZone Small Business Concerns at http://dsbs.sba.gov/dsbs/search/dsp_searchhubzone.cfm

Only firms on the List are HUBZone SBCs and eligible for HUBZone contracting preferences and awards HUBZone Contracts (13 CFR 126.600) 14 HUBZone contracts (including Multiple Award Contracts) include awards to qualified HUBZone SBCs through: Sole source awards 100% HUBZone set-aside awards and partial set-asides Full and open competition, where the HUBZone price evaluation preference is applied Reserves for HUBZone SBCs under Multiple Award Contracts (MAC) Orders set-aside for HUBZone SBCs against a MAC, where the MAC was awarded in full and open competition Requirements to Bid on HUBZone Contract

(13 CFR 126.601) 15 When a HUBZone SBC submits its initial offer on a specific HUBZone contract, it must certify to the CO that: It is a certified HUBZone SBC that appears on SBAs List; There has been no material change in its circumstances that could affect its HUBZone eligibility since the date of HUBZone certification; It is a small business under the NAICS code assigned to the procurement; and It will attempt to maintain the required percentage of employees who are HUBZone residents during the performance of a HUBZone contract. Status as a HUBZone Small Business Concern 16 To be eligible for a HUBZone contract, a concern must be a HUBZone SBC both at the time it submits its initial offer AND at

the time of contract award (13 CFR 126.601(c)) In general, a joint venture may be considered a HUBZone SBC if both joint venturers are certified HUBZone SBCs AND each concern is small under the NAICS code assigned to the contract (13 CFR 126.616) NOTE: On February 5, 2015, SBA published a proposed rule that would change this requirement. 80 FR 6618. Under the proposed rule, a HUBZone SBC may joint venture with a nonHUBZone SBC if each concern is small under the NAICS code assigned to the contract, and other requirements are met. How to Locate HUBZone Contractors Using the Dynamic Small Business Search ( DSBS) 17 DSBS How HUBZone Certification is Displayed 18

Each firms DSBS profile has two fields relevant to HUBZone certification: HUBZone Certified? [ ] Yes [ ] No HUBZone Certification Date "HUBZone Certified? [X] Yes [ ] No indicates the firm is currently HUBZone certified "HUBZone Certified? [ ] Yes [X] No indicates the firm is NOT currently HUBZone certified HUBZone Certification Date indicates the initial date of certification and

does not reflect the dates of any recertification process, which are internal to SBA NOTE: An approval letter or recertification letter is NOT valid evidence that a firm is currently HUBZone certified, since a firm may have been decertified since the notice was issued. DSBS Example of Currently Certified HUBZone Small Business 19 DSBS Example Of Decertified SBC 20 DSBS Example of Non-HUBZone SBC

21 22 Relationship Among Small Business Programs (FAR 19.203) SBAs small business socioeconomic programs include: 8(a) Program HUBZone Program Service-Disabled Veteran-Owned (SDVO) Small Business Program Women-Owned Small Business (WOSB) Program There is no order of precedence among these programs In determining which socioeconomic program to use, the contracting officer should consider, at a minimum Results of market research Agency progress in fulfilling small business goals

HUBZones and Parity B E L O W O R AT S AT A B O V E S AT ($3,500 - $150,000) (>$150,000) Acquisition is automatically reserved exclusively for small business CO may award as: small business set-aside 8(a) set-aside HUBZone set-aside SDVO set-aside WOSB set-aside

If Rule of 2 is met 1. CO expects to receive offers from at least 2 responsible small businesses; and 2. Award will be made at a fair price Acquisition must be set-aside for small business. Before awarding as small business setaside, CO must first consider awarding as 8(a) set-aside (or sole source) HUBZone set-aside (or sole source) SDVO set-aside (or sole source) WOSB set-aside (or sole source) EXCEPTION: Once 8(a), always 8(a) rule - If a requirement has been accepted by SBA under the 8(a) Program, it must remain in the 8(a) Program unless SBA agrees to its release. 24 HUBZONE SET-ASIDES AND

SOLE SOURCE AWARDS HUBZone Set-Aside Procedures (13 CFR 126.607, FAR 19.1305) 25 Below SAT CO MAY award via HUBZone set-aside Above SAT CO SHALL consider a HUBZone setaside before considering a HUBZone sole source award or a small business set-aside To award via HUBZone set-aside, CO must have a reasonable expectation that Offers will be received from 2+ HUBZone SBCs; and Award will be made at a fair market price HUBZone Set-Aside Only One Offer or No

Offers (FAR 19.1305(c)) 26 If the CO receives only one acceptable offer from a certified HUBZone SBC the CO should make an award to that concern no acceptable offers from HUBZone SBCs the CO should withdraw the HUBZone set-aside and set the procurement aside for small business concerns, as appropriate (see FAR 19.203) HUBZone Sole Source Awards (13 CFR 126.612, FAR 19.1306) 27 CO may award a sole source contract to a HUBZone SBC (before considering a small business set-aside) if

CO does not expect to receive offers from at least 2 HUBZone SBCs The acquisition is greater than the SAT Anticipated price of the contract (including options) will not exceed Check for FAR inflation $7 M for a requirement assigned a manufacturing NAICS code; or change $4 M for all other requirements The requirement is not currently being performed by an 8(a) participant and has not been accepted as an 8(a) requirement by SBA The HUBZone SBC has been determined to be a responsible contractor with respect to performance Award can be made at a fair and reasonable price SBA has the right to appeal COs decision not to make a HUBZone sole source award

28 SET ASIDE OF ORDERS Set-Aside of Orders 29 A CO may Set-aside an order placed against a multiple-award contract for HUBZone SBCs (FAR 19.5) and no justification for this exception to fair opportunity is required (FAR 16.5) Set-aside part(s) of a multiple-award contract for HUBZone SBCs (FAR 19.5) Reserve one or more contract awards for HUBZone SBCs under full and open multiple-award procurements (FAR 19.5) Set-aside orders & BPAs under the GSA Schedule (FAR 8.4) Set-Aside of Orders

FAR Part 19 Applies 30 FAR 16.505(b)(2)(i)(F): When setting aside orders for small business concerns: The specific small business program eligibility requirements identified in part 19 apply. FAR 8.405-5(a)(2): When setting aside orders and BPAs against the GSA Schedule: The specific small business program eligibility requirements identified in part 19 apply. What does this mean? Examples: HUBZone joint venture requirements apply HUBZone limitations on subcontracting apply 31 HUBZONE PRICE EVALUATION PREFERENCE (PEP)

32 Price Evaluation Preference For HUBzone SBCs (13 CFR 126.613, FAR 19.1307) The HUBZone price evaluation preference (PEP) shall be used in acquisitions conducted using full and open competition The preference shall NOT be used Where price is not a selection factor (e.g., Architect/Engineer acquisitions) Where all fair and reasonable offers are accepted (e.g., the award of multiple award schedule contracts) HZ PEP only

applied in F&O, including on nonreserved portion or non-set-aside portion Applying the HUBZone PEP 33 The CO shall apply the HUBZone PEP in F&O competition, when the lowest, responsive, responsible offeror is a large business The PEP is applied by adding a factor of 10% to The otherwise lowest, responsive, responsible offer from a large business (AKA the large business that is the apparent successful offeror) Offers from HUBZone SBCs that have waived the PEP Offers from small business concerns that are not the apparent successful offeror NOTE: Apply PEP first, then do best value analysis

NOTE: If PEP waived, then not submitting offer as HZ SBC and do not need to meet LOS or NMR Price Evaluation Preference Examples OFFER: PEP APPLIED (*10%): HUBZone $113 HUBZone $113

Small Large Small $113.3 Large $110 $103 $100 Before PEP applied, the large business is the lowest, responsive and responsible offeror. After applying the 10% PEP, the large business is still the lowest, responsive and responsible offeror.

In this example, the application of the PEP does not benefit the HUBZone SBC. NOTE: If price equal Award to the HZ SBC Price Evaluation Preference Examples OFFER: PEP APPLIED (*10%): HUBZone $100 HUBZone $100 Small $97 Small

$106.7 Large $95 Large $104.5 Before PEP applied, the large business is the lowest, responsive and responsible offeror. After applying the 10% PEP, the large business is no longer the lowest, responsive and responsible offeror. In this example, the application of the PEP does benefit the HUBZone SBC. Price Evaluation Preference Examples

36 OFFER: HUBZone $100 Small $95 Large $97 PEP NOT APPLIED Before PEP applied, the small business is the lowest, responsive and responsible offeror. Since lowest offeror is not a large business, the HUBZone PEP is not applied.

37 LIMITATIONS ON SUBCONTRACTING AND NONMANUFACTURER RULE (NMR) Limitations on Subcontracting (LOS) Final Rule published at 81 FR 34243 Effective June 30, 2016 NEW: A HUBZone SBC prime contractor may subcontract part of a HUBZone contract, provided the HUBZone SBC meets the following requirements: 38 Services (except construction) Spend no more than 50% of the value of the prime contract on subcontractors that are not HUBZone SBCs Supplies (from a manufacturer) Spend no more than 50% of the value of the

prime contract on subcontractors that are not HUBZone SBCs General Construction Spend no more than 85% of the value of the prime contract on subcontractors that are not HUBZone SBCs Cost of materials are excluded Special Trade Construction Spend no more than 75% of the value of the prime contract on subcontractors that are not HUBZone SBCs Cost of materials are excluded NOTE: Subcontractors that are also HUBZone SBCs are referred to as similarly situated entities Nonmanufacturer Rule (NMR)

(13 CFR 126.601, FAR 19.1303) 39 NEW: A HUBZone SBC may submit an offer for supplies as a nonmanufacturer if it meets the requirements of the NMR set forth at 13 C.F.R. 121.406(b)(1) Final rule effective June 30 (81 FR 34243) eliminated the requirement that the manufacturer also be a HUBZone SBC NEW: A CO may request a waiver of the NMR for a HUBZone contract Final rule effective June 30 authorized NMR waivers for HUBZone contracts As a result, the HUBZone programs treatment of the NMR is now consistent with SBAs other socioeconomic programs For HUBZone contracts at or below $25,000, a HUBZone SBC may supply the end item of any domestic manufacturer. This means the manufacturer may be a large business, but the product acquired must be manufactured or produced in the U.S. Compliance With LOS & NMR

40 When do the HZ LOS and NMR apply? HUBZone set-asides Partial HUBZone set-asides HUBZone reserves Orders set-aside for HUBZone SBCs Awards to HUBZone SBCs under F&O after HZ PEP applied What is the compliance period? Set aside (full or partial): Base term and each subsequent option period HOWEVER, CO may require concern to meet the LOS or NMR for each order Order set-aside under F&O: Term of order Questions 42

SBA Quick Reference Dynamic Small Business Search 43 44 Summary of CFR Regulations SBA Size Regulations 13 CFR Part 121 HUBZone Regulations 13 CFR 126.616 SBA Certificate of Competency

13 CFR 125.5 Service-Disabled Veteran 13 CFR 125.15(b) 8(a) and SDB Regulations 13 CFR 124.513 Small Disadvantaged Business 13 CFR 124.1002(f) WOSB Program 13 CFR 127

SBA Prime Contracting 13 CFR 125.2 SBA Subcontracting 13 CFR 125.3 Types of SBA Contacts and Offices 45 A. SBA Government Contracting Area Offices 1. SBA Procurement Center Representatives (PCRs) 2. SBA Commercial Market Representatives (CMRs) B. SBA District Offices 1. Business Opportunity Specialists (BOS)

C. SBA Regional Offices D. SBA Headquarters Six SBA Government Contracting Areas at hyperlink: https://www.sba.gov/content/pcrdirectory 46 A. SBA Quick Reference - SBA Area Offices 47 1. Size protests (with recertification) 13 CFR 121.1001 13 CFR 121.1010 2. Locating nearest SBA staffer 3. Certificate of Competency FAR 19.302 FAR 19.4

FAR 19.6 13 CFR 125.5 4. COC Limitations on Subcontracting Compliance FAR 19.601 13 CFR 125.6(f) 5. Receiving copies subcontracting plans FAR 19.705-6 48 B. SBA Quick Reference SBA Procurement Center Representatives (PCRs) FAR 19.402 Small Business Administration procurement center representatives. (a)(1) The SBA may assign one or more procurement center representatives to any contracting activity or contract administration office to carry out SBA policies and programs

(2) If a SBA procurement center representative is not assigned to the procuring activity or contract administration office, contact the SBA Office of Government Contracting Area Office.. (b) Upon their request and subject to applicable acquisition and security regulations, contracting officers shall give SBA procurement center representatives.access to all reasonably obtainable contract. B. SBA Quick Reference SBA PCRs, cont. 49 1. SBA PCR coordination records FAR 19..501(b) 13 CFR 125.2 2. Small business set-aside appeals FAR 19.505 13 CFR 125.2(b)(7) 3. HUBZone set-aside appeals

FAR 19.1305 FAR 19.1306 13 CFR 126.61 4. SDVOSB set-aside appeal FAR 19.1405 FAR 19.1406 13 CFR 125.22 5. Reporting bundling to SBA (MATOCs) FAR 19.202-1(e)(1) 13 CFR 125.2 6. SBA subcontracting plan reviews-copies FAR 19.705-5(3) 13 CFR 125.2(b)(6)(iii) FAR 19.705-6(c) 13 CFR 125.2(b)(6)(iii)(C) 7. SBA subcontracting program review FAR 19.707(4) 13 CFR 125.2(b)(6)(iii)(C) 8. Small business TFD FAR 49.402-3 (e)(4)) (Termination for default)

9. Surveillance review of agency contracting Small Business Coordination Forms Sent To SBA PCRs Agency Form Title 1 Commerce CD 570 Small Business Set-aside Review 2

Defense 2579 Small Business Coordination Record 3 Energy 4220.2 Small Business Review Form 4 GSA

2689 Small Business Analysis Record 5 HHS 653 Small Business Review Form 6 Homeland Security 700-22 Small Business Review Form

7 Interior 1886 Acquisition Screening and Review Form 8 Labor DL1-2004 Small Business Procurement Determination 9

NASA NF 1787 Small Business Review Sheet 10 State DS-1910 Small Business Clearance Form 11 Transportation 4250

Small Business Program Review Form AD-1205 Small Business Program Procurement Review 2268 Procurement Request Review For Small Business 50 12 13 USDA

VA Document that you have provided SBA Area Directors with copies of subcontracting plans 51 19.705-6 Postaward responsibilities of the contracting officer. : (a) Notifying the SBA of the award by sending a copy of the award document to the Area Director, Office of Government Contracting, in the SBA area office where the contract will be performed. (c) Giving to the SBA procurement center representative.a copy of (1) Any subcontracting plan submitted in response to a sealed bid solicitation; and (2) The final negotiated subcontracting plan that was incorporated into a negotiated contract or contract modification. (d) Notifying the SBA procurement center representative. of the opportunity to review subcontracting plans in connection with contract modifications. C. SBA Quick Reference - SBA Commercial Market Representatives

(CMRs) link at: https://www.sba.gov/content/cmr-directory 52 1. Prime contractor portfolio management 13 CFR 125.3 2. Reviews of subcontracting plan holders 13 CFR 125.3 3. Matchmaking 13 CFR 125.3 4. SBA SUB-Net link at: http://www.sba.gov/content/sub-net 5. SBA Subcontracting Opportunities Directory link at: http://www.sba.gov/subcontracting-directory 6. SBLO Handbook link at: http://www.sba.gov/content/small-business-liaison-officerhandbook D. SBA Quick Reference SBA Regional and District Offices 53

Link to district offices at: http://www.sba.gov/about-offices-list/3 D. SBA Quick Reference - SBA District Offices, cont. 54 To locate SBA 8(a) business development servicing office, check Dynamic Small Business Search at the link: http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm and then local resources at the link http://www.sba.gov/tools/local-assistance/districtoffices E. SBA Quick Reference - SBA Headquarters 55 1. HUBZone status protests FAR 19.306

13 CFR 126.801 2. NAICS code appeal FAR 19.30 3 13 CFR 121.1103 3. Non-manufacturer rule waivers FAR 19.102(f)(1)-(7) 13 CFR 121.1204 4. SDVOSB status protest FAR 19.307 13 CFR 125.23 5. WOSB Program status protest FAR 19.308/13 CFR 1275.600 55

FAR 19.102 (f ): No class waiver to NMR? Check out an individual waiver* 56 A. If you find no class waivers, an SBA individual waiver to the Nonmanufacturer Rule (NMR) may help you to achieve small business goals if*: 57 B. A WAIVER FOR A SET-ASIDE IS NOT NEEDED WHEN: 1. ONE SMALL BUSINESS MANUFACTURER: * SMALL BUSINESS SET-ASIDE 2. SMALL BUSINESS MANUFACTURER, BRAND SPECIFIC OF ANY DOLLAR SIZE WITH FAR 6 JUSTIFICATION: * SMALL BUSINESS SET-ASIDE

3. LARGE BUSINESS, BRAND SPECIFIC (OR BRAND EQUIVALENT) REQUIREMENT $25,000 OR LESS WITH FAR 6: * SMALL BUSINESS SET-ASIDE C. GSA SCHEDULE: USE THE CLOSEST CODE LISTED ON THE SCHEDULE. THEN SAME AS ABOVE IF NO CLASS WAIVER. D. EXCEPTION TO NMR IF PROCUREMENT $25,000 OR LESS. (FAR 19.102 (f)(7)(B)) NMR Program Office 58 The preferred and most expeditious method for asking questions and submitting waiver requests is by email to [email protected] 59

Find your PCR at https://www.sba.gov/content/pcr-directory SBA 1st First Wednesday Virtual Learning 2017

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