But I m not a minority and I m not disadvantaged how can I be a Small Business?
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1 But I m not a minority and I m not disadvantaged how can I be a Small Business? De-mystifying Small Business Size Categories and How They Apply Your Logo 2017
2 How can I be a small business? De-mystifying Small Business Self-Certification 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 Employees o Formal SBA Certification documents are not required Except for HUBZone, 8a, and ANC o Many categories of Small Business don t require certification through a third party, including SB, SDB, WOSB, VOSB, SDVOSB 2
3 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 National Minority Supplier Development Council - 3
4 SMALL BUSINESS FEDERAL CONTRACTING U. S. Small Business Administration 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) 4
5 SMALL BUSINESS FEDERAL CONTRACTING How does the SBA determine a business s size standard? 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 5 EXAMPLE: Sheet Metal Work Manufacturing Size Standard = 500 Employees
6 SMALL BUSINESS FEDERAL CONTRACTING U. S. Small Business Administration Table of Size Standards Manufacturers and Plants Number of Employees determines size Services Revenue determines size 6
7 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 7
8 SMALL BUSINESS FEDERAL CONTRACTING Small Business Types by Socio-Economic Category SMALL BUSINESS CATEGORY Small (SB) Small Disadvantaged (SDB) 8(a) Small Disadvantaged (SDB) Woman-Owned (WOSB) Historically Underutilized Business Zone (HUBZone/HUBZ/ HUB) DESCRIPTION Must meet SBA Criteria for Small Business Can Self-Certify 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]) 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 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* 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 8
9 SMALL BUSINESS FEDERAL CONTRACTING Small Business Types by Socio-Economic Category CATEGORY Veteran-Owned (VOSB) Service Disabled Veteran-Owned (SDVOSB) Alaskan Native Corporation (ANC) And Tribal Corporations Historically Black Colleges & Universities (HBCUs), and Minority Institutions (MIs) DESCRIPTION Must meet SBA Criteria for Small Business 51% Owned/Controlled by Veteran(s) as defined in 38 USC 101(2) Can Self-Certify 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 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) HBCUs and MIs are normally not organized for profit, so they cannot be considered small businesses in accordance with SBA s regulations (13 CFR ); 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 9
10 SIZE MATTERS Why is size standard important to Kirlin Builders? Kirlin Builders (KB) demonstrates good faith effort in accordance with FAR Utilization of Small Business Concerns, and 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 10
11 SIZE MATTERS Why is size standard important to Kirlin Builders? 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 ); (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. 11
12 Here to help: Lisa C. King Administrator Contracts and Small Business Internal Subcontractors THANK YOU! You are a critical part of our success! 12
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