DoingBusiness2.0 Presentation: SBA Business Development & Contracting Programs

1. Washington Metropolitan Area District Office
SBA’s
Business Development
and
Contracting Programs

2. Washington Metropolitan Area District Office
Small Business Act, 1953
“It is the Declared Policy of the Congress
…to insure that a fair proportion of the
total purchases and contracts or
subcontracts for property and services for
the Government be placed with small
business enterprises.”

3. Washington Metropolitan Area District Office
Federal Procurement
$500 Billion +$500 Billion +
per yearper year
U.S.
Government:
The World’s
Largest
Customer
FederalFederal
Contracts =Contracts =

4. Washington Metropolitan Area District Office
Federal Procurement
Small Businesses: 23%
Service-Disabled Vets: 3%
SDB: 5%
Women-owned: 5%
HUBZone: 3%
PROCUREMENT TARGETS:
$500 Billion +$500 Billion +
per yearper year

5. Washington Metropolitan Area District Office
• District of Columbia
• Montgomery County, MD
• Prince George’s County, MD
• Fairfax County, VA
• Loudoun County, VA
• Arlington County, VA
• City of Alexandria, VA
• City of Fairfax, VA
U.S. Small Business Administration
Washington Metropolitan Area District

6. Washington Metropolitan Area District Office
What part does the SBA play
in procurement?
1. Keeping Score:
SBA negotiates annual procurement goals with each Federal
agency
Ensures that the combined goals > 23%
Reviews each agency’s results
Issues annual Small Business Procurement Scorecard
for entire Federal Government

7. Washington Metropolitan Area District Office
2. Counseling and Training:
Procurement training and matchmaking events.
Resource Partners help business owners find and
bid on procurement opportunities.
Resource Partners include: SCORE, SBDC, WBC.
What part does the SBA play
in procurement?

8. Washington Metropolitan Area District Office
3. Certification
SBA-Certified:
HUBZone Empowerment Contracting Program
8(a) Business Development Program
Self-Certified:
Small Disadvantaged Business
Service Disabled Veteran-Owned Business
Women-Owned Small Business
What part does the SBA play
in procurement?

9. Washington Metropolitan Area District Office
SBA-Certified
Contracting Programs
HUBZone Empowerment Contracting Program
8(a) Business Development Program

10. Washington Metropolitan Area District Office
HUBZone
Empowerment Contracting Program
13CFR Part 126
Designed to stimulate economic development
and create jobs in urban and rural
communities.
HUBZone = Historically Underutilized Business Zone

11. Washington Metropolitan Area District Office
HUBZone Empowerment Contracting
Program
HUBZone contracts are awarded to a qualified
HUBZone Small Business Contractor (SBC) through
any of the following means:
Set-aside awards based on competition restricted to qualified
HUBZone SBCs.
Awards to qualified HUBZone firms through full and open
competition after a price evaluation preference in favor of
qualified HUBZone SBCs (10%, where price is considered an
evaluation factor).

12. Washington Metropolitan Area District Office
HUBZone Requirements
Must be a SMALL business
Concern must be owned and controlled only by US
citizens
Principal office of the concern must be located in a
HUBZone; and
At least 35% of the concern’s employees must
reside in a HUBZone

13. Washington Metropolitan Area District Office
8(a) Business Development Program
13CFR Part 124
Helps eligible small socially and economically
disadvantaged businesses grow and become
sustainable.
Training in business management & marketing
Opportunities to team with other companies

14. Washington Metropolitan Area District Office
8(a) Eligibility
United States citizen
Socially & economically disadvantaged
Own unconditionally at least 51% of concern
Control & manage concern on full-time basis
Good character - not debarred, suspended, parole or
probation
Registered in System for Award Management (SAM)
database
Two (2) years business history in primary industry
classification, as shown with tax returns (may sometimes be
waived)
Business must be small per SBA’s size standards









15. Washington Metropolitan Area District Office
Who is Socially and Economically
Disadvantaged?
Socially disadvantaged persons have been
subjected to racial or ethnic prejudice or cultural bias
because of their identities as members of groups.
People are economically disadvantaged if they
are socially disadvantaged and their ability to compete
in the free enterprise system has been impaired due to
diminished access to capital and credit.

16. Washington Metropolitan Area District Office
SBA will examine:
Personal income for the past three years
Personal net worth
Fair market value of all assets
Spouse’s financial condition, in certain
circumstances
Determining Economic Disadvantage

17. Washington Metropolitan Area District Office
Program enrollment = 9 years
Program participation divided into 2 stages:
Year 1 – 4 Developmental
Year 5 - 9 Transitional
Must maintain eligibility throughout
enrollment
8(a) Business Development Program

18. Washington Metropolitan Area District Office
New Suspension Rule
For Military Service
If the disadvantaged individual owner(s) of the 8(a) firm
are called to active military status, SBA will no longer
terminate the firm.(13 CFR 124.305)
Firm may elect to:
be suspended from program participation until original
owner returns from duty (nine-year clock stops during
suspension, resumes from that point), or
continue participation if another disadvantaged
individual(s) assumes control of the firm

19. Washington Metropolitan Area District Office
Size for Primary NAICS Code
Firm must generally remain small. SBA may
graduate a participant prior to the expiration of its
program term if firm does not remain small,
as adjusted, for three successive program
years.

20. Washington Metropolitan Area District Office
Reporting on
Performance of Work Requirements
Annual Review: Participant must demonstrate
how it is meeting the performance of work
requirements for each 8(a) contract that it is
performing as part of a JV
8(a) Contract: At the completion of every 8(a)
contract awarded to a JV, the Participant must
explain how Performance of Work Requirements
were met

21. Washington Metropolitan Area District Office
Completion of Program Term
A concern may leave the program by:
Expiration of the program term (Nine years)
Voluntary withdrawal or voluntary early
graduation
Graduation (13 CFR 124.302)
Early graduation (13 CFR 124.302 and 304)
Termination (13 CFR 124.303 and 304)

22. Washington Metropolitan Area District Office
Joint Ventures: Structure
Requirements tightened for joint ventures (JV) so that non-
disadvantaged firms do not unduly benefit from the 8(a)
program
JV agreement may be informal or formal (separate
business structure) but must be in writing
Can be unpopulated or populated (JV employs separate
employees). Rules are different for each.

23. Washington Metropolitan Area District Office
Joint Ventures:
Generally may not be awarded more than three
contracts over a two year period, starting from the
date of the award of the first contract, without the
partners to the JV being deemed affiliated for all
purposes. (13 CFR 121.103)
Same entities may create additional JVs and each
new joint venture entity may be awarded up to 3
contracts.

24. Washington Metropolitan Area District Office
Mentor Protégé Program
Non-profits can be Mentors
Mentor can have up to 3 protégés at one time
A firm cannot be both a Protégé and a Mentor at the
same time
Protégé can have second Mentor, corresponding to an
unrelated, secondary NAICS code
Assistance provided by the Mentor must be tied to the
Protégé’s SBA-approved business plan
SBA prohibited from approving a new Mentor/Protégé
relationship within six months of the end of an 8(a)
Participant’s program term

25. Washington Metropolitan Area District Office
Mentor/Protégé Agreement must be approved by SBA
before the firms can submit a JV offer on a procurement
as a small business
In order to receive the exclusion from affiliation on
any 8(a) or non-8(a) contracts, the agreement must
comply with all 8(a) JV requirements
SBA approved Mentor/Protégé joint ventures are small
for federal contracts
Contracting benefits derived from Mentor/Protégé
relationship end once the protégé leaves the 8(a) program
Mentor Protégé Program

26. Washington Metropolitan Area District Office
Failure to Provide Assistance
Consequences if Mentor does not provide agreed-to
assistance:
SBA may terminate the Mentor/Protégé Agreement
Mentor is ineligible to participate for 2 years
SBA may recommend a stop work order for each contract
the Mentor and Protégé are performing as a JV and where
they have received the exclusion from affiliation
SBA may authorize substitution of protégé firm for the JV
May constitute grounds for Government-wide suspension
or debarment

27. Washington Metropolitan Area District Office
Self-Certified
Contracting Programs
Small Disadvantaged Businesses (SDB)
Service-Disabled Veteran-Owned Businesses
(SDVOB)
Women-Owned Small Businesses (WOSB)

28. Washington Metropolitan Area District Office
Small Disadvantaged Business (SDB)
Program
Self-certifying program as of October 2008
Subcontracting opportunities
SDBs are eligible for special bidding benefits
Prime contractors get credit towards
small business goals for using SDBs as subs

29. Washington Metropolitan Area District Office
SDB Eligibility Criteria
Similar to 8(a), except higher allowable Net Worth
After excluding the individual’s equity in the firm and equity
in the primary residence, net worth may not exceed
$750,000.*
Net Worth
less equity in primary residence
less equity in business
equals adjusted net worth
(which must not exceed $750,000 )
*when married, separate statements from each spouse to show each
individual’s joint or community property shares and separate property.

30. Washington Metropolitan Area District Office
Service-Disabled Veteran-Owned
Business (SDVOB) Program
Self-certifying program
SDVOBs are eligible to bid on set-aside
contracts
Subcontracting opportunities
Prime contractors get credit towards
small business goals for using SDVOBs as
subs

31. Washington Metropolitan Area District Office
SDVOB Program:
Who is Eligible?
Size: Must be small according to SBA
standards
Ownership: Must be at least 51% directly and
unconditionally controlled by one or more
service disabled veterans
 Status: Owners(s) must have Form DD-214
indicating honorable discharge

32. Washington Metropolitan Area District Office
Women-Owned Small Business
(WOSB)Program 13CFR Part 127
Program Started February 2011
Firms self-certify as
Women-Owned Small Businesses (WOSB),
or
Economically-Disadvantaged Women-
Owned Small Businesses (EDWOSB)
For 83 target industries (NAICS codes) where WOSBs are
under-represented, contract officers may set-aside
contracts for WOSBs or EDWOSBs only (under specific
circumstances)

33. Washington Metropolitan Area District Office
WOSB Program: Who is eligible?
Size: Must be small according to SBA size standards
Ownership: Must be at least 51% directly and unconditionally
owned by a woman or women
Citizenship: Majority owner or owners must be U.S. citizens
Management: Control and day-to-day management must be
in hands of a woman or women

34. Washington Metropolitan Area District Office
WOSB Program: EDWOSB
An Economicallly-Disadvantaged Woman-
Owned Small Business (EDWOSB) is a WOSB
which is owned by a woman or women whose:
Personal Net Worth < $750,000
Average Annual Income < $350,000 (preceding 3 year
average)
Total Assets < $6,000,000 (including primary residence
and business)

35. Washington Metropolitan Area District Office
WOSB Program: Set-asides
I. RAND Study (2007) = 83 Designated NAICS Codes:
45 NAICS Codes =
Women-owned businesses “under-represented”
Competition may be restricted to certified EDWOSBs
38 NAICS Codes =
Women-owned businesses “substantially under-represented”
Competition may be restricted to ALL CERTIFIED
WOSBs
II. Award < $3 million ($5 million for manufacturing)
III. “Reasonable expectation” of two or more WOSBs or
EDWOSBs bidding
IV. “Fair and reasonable” price

36. Washington Metropolitan Area District Office
WOSB Program: Certification
Self-Certification:
•Register and enter data in SAM (System for Award
Management) www.sam.gov
•Submit documents to SBA’s WOSB Program Repository
See www.sba.gov/wosb for details
Third Party Certification:
SBA has approved several third-party certifiers.

37. Washington Metropolitan Area District Office
For More InformationFor More Information
Contact your
Washington Metropolitan Area District Office:
www.sba.gov/dc
or
202-205-8800