Archive

Service Disabled Veteran-Owned Small Business

Federal mentor/protégé programs are designed to encourage approved mentors to provide various forms of business development assistance to approved protégé firms. A mentor firm may be either a large or small business, eligible for award of a Government contract that can provide developmental assistance to enhance the capabilities of protégés to perform as subcontractors. A protégé firm must be: A SB, WOSB, SDB, HUBZone, VOSB, or SDVOSB, Small in the NAICS code for the services or supplies to be provided by the protégé under its subcontract to the mentor; and Eligible for receipt of government contracts.

The purpose of the mentor/protégé relationship is to enhance the capabilities of the protégé and to improve its ability to successfully compete for contracts. There are 13 federal agencies with over 1100 active mentor protégé agreements.

 

In March 2011, the GAO (http://www.gao.gov/new.items/d11548r.pdf) reported the following number of federal agency mentor protégé programs:

Agency Approved   Agreements Agency Approved   Agreements Agency Approved   Agreements
NASA  202-358-2088   12 FAA   202-267-7454  10 DOE   202   586-3835 120
GSA  202-208-0257   65 VA  24 Treasury   202   622-8213   58
SBA   District Office 482 US   AID 202 567-4606    6 State   703-875-6881   86
EPA    202-447-5280    4 DHS   202-447-5280 220 DOD   800-540-8857 101
HHS   301-443-1715    9 DOT N/A Navy   202-685-6489 N/A
Army   703-693-6113   Air Force  703-696-1103      

 

Participation in a federal mentor protégé program has the potential to create a win-win for participants to get larger contracts and access to small business set aside market in the federal government. The win-win is created when the protégé’s capability and capacity to perform on federal contracts is enhanced by the affiliation rules, limitations on subcontracting and the mentor’s delivery of developmental assistance. There is no affiliation in the major federal agency mentor protégé programs including FAA, U.S. Treasury, Department of Homeland Security, and the Health and Human Services. The FAA states “A protégé firm may not be considered an affiliate of a mentor firm solely on the basis that the protégé firm is receiving developmental assistance referred to in Section 1.12 under the program. However, affiliation may be found for other reasons in accordance with the SBA general principles of affiliation. The U. S. Treasury says “a protégé firm is not considered an affiliate of a mentor firm solely on the basis that the protégé firm is receiving developmental assistance from such mentor firm under the program”.

The Department of Homeland Security says “A protégé will not be considered an affiliate of a mentor solely on the basis that the protégé has or will receive developmental assistance from the mentor under this program” and The Health and Human Services says “A protégé firm may not be considered an affiliate of a mentor firm solely on the basis that the protégé firm has or will receive developmental assistance from the mentor firm under this program”.

The Limitations on Subcontracting clause places restrictions on the percentage of cost that can be subcontracted in order to be awarded a full or partial small business set-aside contract, an 8(a) contract, WOSB, EDWOSB, SDVOSBC or HUBZone SBC prime contractor. In most cases the restrictions include:

1) In the case of a contract for services (except construction), the concern will perform at least 50 percent of the cost of the contract incurred for personnel with its own employees. (2) In the case of a contract for supplies or products (other than procurement from a non-manufacturer in such supplies or products), the concern will perform at least 50 percent of the cost of manufacturing the supplies or products (not including the costs of materials). (3) In the case of a contract for general construction, the concern will perform at least 15 percent of the cost of the contract with its own employees (not including the costs of materials). (4) In the case of a contract for construction by special trade contractors, the concern will perform at least 25 percent of the cost of the contract with its own employees (not including the cost of materials).

The development assistance includes but is not limited to: 1) Assistance by the mentor’s personnel in (i) General business management, including organizational management, financial management, personnel management, marketing, business development, and overall business planning; (ii) Engineering, environmental and technical matters; and (iii) Any other assistance designed to develop the capabilities of the protégé under the developmental program.(2) Award of subcontracts or other contracts on a noncompetitive basis. (3) Advance payments under such subcontracts in accordance with FAR Subpart 32.4, Advance Payments for Non-Commercial Items. (4) Loans. (5) Investment(s) in the protégé in exchange for an ownership interest in the protégé, not to exceed 10 percent of the total ownership interest. Investments may include, but are not limited to, cash, stock, and contributions in kind. (6) Assistance that the mentor obtains for the protégé from one or more of the following: (i) Small Business Development Centers established pursuant to Section 21 of the Small Business Act (15 U.S.C. 648).(ii) Entities providing procurement technical assistance pursuant to 10 U.S.C. Chapter 142 (Procurement Technical Assistance Centers).(iii) Historically Black Colleges and Universities.(iv) Minority institutions of higher education.

American Express Open found in their survey of 1,508 small businesses that the most significant economic benefits may come from participation in a formal mentor-protégé program. While few active small business contractors have pursued entering such programs, those who have are investing more time and money seeking Federal contracts and are reaping the reward in greater efficiency and higher sales, profitability and employment – reinforcing the adage that it takes money to make money.

See http://media.nucleus.naprojects.com/pdf/American_Express_OPEN_Victory_in_Procurement_survey_3.pdf

Participation in a federal mentor protégé program can increase the mentor and protégé’s contract sales and company profitability. The absence of no affiliation, limits on subcontracting and the developmental assistance including contract financing create the win win environment. The mentor helps the protégé get contracts and the protégé can sub some of the contract to the mentor.

Steps 1 & 2 discussed how important it is to know key government websites and register the company in the CCR and ORCA. Steps 3 and 4 include determining the company’s eligibility for the socio economic programs and the importance of the Federal Supply Classification Codes (FSC) and North American Industry Classification System (NAICS) Codes. Understanding the certifications and classifications programs enhance a company’s ability to get government jobs through federal contracts. FCIS has developed marketing reports that help companies identify contracting officers that utilizes the socio economic programs for contracting and identify agency contracting offices by classification systems.

Step 3.  Determine if the company qualifies for one or more of the SBA and Veteran Administration Certification Programs.  The SBA currently has three socio economic certification programs: 8(a), HUBZone and Women-Owned Small Business Programs. The 8(a) Business Development program assists eligible small businesses to compete by providing them with business developmental assistance. The owner of a small business must be socio or economic disadvantaged. Economic disadvantage is based on personal income ($250,000 for initial eligibility, $350,000 for continued eligibility) and total assets ($4 million for initial eligibility, $6 million continued eligibility). Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as members of a group. Social disadvantage must stem from circumstances beyond their control. Companies with the 8(a) certification are eligible for set aside contract opportunities.

The Historically Underutilized Business Zone (HUBZone) program entitles qualified firms to special bidding benefits in the federal contracting arena. To qualify for the program, a business (except tribally-owned concerns) must be a small business by SBA standards, must be owned and controlled at least 51% by U.S. citizens, or a Community Development Corporation, an agricultural cooperative, or an Indian tribe, the company principal office must be located within a “Historically Underutilized Business Zone,” which includes lands considered “Indian Country” and military facilities closed by the Base Realignment and Closure Act and At least 35% of its employees must reside in a HUBZone map area.

Service-Disabled Veteran-Owned Small Business Concerns (SDVOSBC) – (http://www.sba.gov/content/service-disabled-veteran-owned-small-business-concerns-sdvosbc) The Veterans Benefits Act of 2003  established a procurement program for Service-Disabled Veteran-Owned Small Businesses that allows contracting officers to restrict competition to SDVOSBCs and award a sole source or set-aside contract where certain criteria are met. In addition, the rule allows SDVOSB concerns to self-certify however the eligible veteran should get certified by VetBiz in order to withstand any certification challenges. In order to be eligible for the SDVOSBC, the Department of Veterans Affairs or Department of Defense must certify service disabled veteran has a service-connected disability, the Company must be small under the NAICS code assigned to the procurement, the Service disabled veteran must own 51% of the company unconditionally and control the management of daily operations and must hold the highest officer position in the company.

Women-Owned Small Business (WOSB)/Economically Disadvantaged Women-Owned Small Business (EDWOSB) Program– (http://www.sba.gov/content/contracting-opportunities-women-owned-small-businesses) The Women-Owned Small Business (WOSB) Federal Contract program authorizes contracting officers to set aside certain federal contracts based on approved NAICS for eligible Women-owned small businesses (WOSBs) or Economically disadvantaged women-owned small businesses (EDWOSBs).  Those firms can self-certify their status. An SBA approved 3rd Party Certifier is recommended in order to withstand any challenges.

Step  4. The company must be able to match its products or services with the Federal Supply Classification Codes (FSC) and North American Industry Classification System (NAICS) Codes. The NAICS and FSC codes should be included in the CCR and ORCA registration. NAICS and FSC codes are used by the government to establish business size standards (http://www.sba.gov/content/table-small-business-size-standards), identify potential vendors for government jobs, accumulate economic statistics and classify government contracts for the Federal Procurement Data System (FPDS).

The FY 2012 USG Procurement by NAICS_PSC report provides a breakdown of procurement by NAICS and PSC. The report indicates that four hundred and forty (440) Agency Contracting Offices completed 588,946 transactions with 69,014 vendors in the amount of $49 billion. These transactions were classified using 922 NAICS and 9,733 PSC. See report FY 2012 USG Procurement by NAICS_PSC Understanding the NAICS and PSC codes will lead to more government contracts. Small business can use these classifications to determine how much the USG buys and which agency contracting offices make the purchase. The FPDS is a good data set to build a federal marketing plan.

The most common questions we hear from entrepreneurs who want to do business with the federal government are, “Do I really need a federal marketing plan? Is writing a federal marketing plan really the best use of my time?” Our answer to these questions is almost always, “Yes.”

In reality, federal marketing plans do take a long time to write, require that you have a tremendous amount of data at your fingertips, depend in part on projections, and often are responsible for creating a long list of research you still need to conduct and other work you need to complete.

But despite all of that, federal marketing plans are one of the most effective tools for the business owner/operator who is starting or growing their business with the federal government.

Here is what we consider the most important reasons for having a federal marketing plan:

• A Federal Marketing Plan is Simply a Must-Have for Some Businesses
• A Federal Marketing Plan Helps You Make Decisions
• A Federal Marketing Plan Can Be a Reality Check
• A Federal Marketing Plan Can Give You New Ideas
• A Federal Marketing Plan Creates an Action Plan

Your company should have a Federal Marketing Plan (FMP) if your company is doing business or planning to do business with the Federal Government. Our FMP helps companies target market their goods and services to the right agency contracting office location after first answering the basic question of does the federal government even buy your company’s products and/or services. Your Federal Marketing Plan will be a unique and customized resultants-driven solution for your company to make effective and successful communication to profitably market your products/services to the federal government.

Because of our ability to make the complex easy to understand; you’ll have the information you need to make effective, successful and measurable direct government marketing decisions. Your FMP will have current data from disparate data sources like government contract histories and other federal data sets that would identify predetermined groups, logical relationships, associations and anticipated behavior patterns that would determine the type of contracts used to purchase your goods or services. With that information you’d be able to create your own unique key performance indicators of marketing success and execute a profit-driven government marketing campaign. In the end, we deliver current and relevant insights – rather than just producing tables and graphs. We analyze the massive $500BN government contract data specifically for our clients’ to target a market in the government. And because everyone uses their results in different ways, we design our reports specifically for each client’s particular needs.

Click here to download our sample Federal Marketing Plan.

We work with you as a partner and encourage your feedback during every step; from goal setting, through methods selection, to the final reports and marketing plan. We are effective and comfortable working with business owners, senior executives, marketing departments, non-profit committees, advertising, public relations and marketing firms or any other stakeholder in the project/company.

Call us at 469-814–8457 x100 for a free initial consultation and assessment. Please have your company’s NAICS and PSC codes available when you call.

Click here to download our sample Federal Marketing Plan.

DoD, GSA, and NASA have adopted as final, with changes, the interim rule amending the Federal Acquisition Regulation (FAR) to implement a section of the Small Business Jobs Act of 2010 that clarifies that there is no order of precedence among the small business socioeconomic contracting programs. Accordingly, this final rule amends the FAR to clarify the existence of socioeconomic parity and that contracting officers may exercise discretion when determining whether an acquisition will be restricted to small businesses participating in the 8(a) Business Development Program (8(a)), Historically Underutilized Business Zones (HUBZone) Program, Service Disabled Veteran-Owned Small Business (SDVOSB) Program, or the Women-Owned Small Business (WOSB)

Click here to download Federal Register/Vol. 77. No. 42/Friday, March 2, 2012/Rules and Regulations