Small Business Considerations New Times, New
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2 Small Business Considerations New Times, New Breakout Session # B01 Kevin Linden Performance Learning Director Defense Acquisition University (DAU) March 12, :00pm - 3:15pm
3 AGENDA How to Assist Small Businesses Subcontracting Plans Upcoming Small Business Rules 2
4 Assisting small businesses in finding government contracting and subcontracting opportunities 3
5 Identify the tools needed to effectively counsel small businesses Describe the various sources of assistance Identify the planning process for outreach events Describe ways to assist small businesses with developing a market strategy Match small business capabilities with appropriate customer 4
6 Tools to Counsel Small Businesses DFARS/PGI (e) Guidelines for counseling & maintaining outreach programs Contracting Knowledge Currency Familiarity with SB Programs Understand installation/ agency requirements Develop Communication Skills Understand FAR, DFARS and where to go Be current in legislative changes and new policy implementation HUBZone, Mentor-Protégé, SBIR/STTR, etc. Know current and projected requirements (get involved early with acquisition team) Know customers, locations, & other POCs, etc. Listening, Empathy, Persuasion, Public Speaking, Respond to inquiries - Get back to people (both government and small businesses) 5
7 Various Sources of Assistance PTACs help established businesses market themselves SBDCs help businesses get started 6
8 Various Sources of Assistance, Cont Federally Sponsored Assistance Defense Logistics Information Service (DLIS) DoD Regional Small Business Councils Minority Business Development Centers Other SBA Programs Responsible for cataloging National Stock Numbers (NSNs) Useful to SB to determine FSC; Prepare and maintain item definitions Perform data dissemination functions Nationwide network of Small Business Managers organized to promote the National Small Business Programs Under the Department of Commerce. Mission to increase opportunity for ethnic and racial minorities through formation, development, & preservation of competitive minority firms SBA has variety of other programs & services available. Training & education Advisory services Publications Financial programs Contract assistance 7
9 Various Sources of Assistance, Cont Non-Profit and Targeted Assistance Chambers of Commerce Provides opportunities to network, to share information, and find potential teaming partners Economic Development Centers (EDCs) & Community Development Corporations (CDCs) Offer local business counseling, training, and opportunities Manufacturing Enterprise Partnerships (MEPs) Nationwide network of not-for-profits to provide small & medium manufacturers with assistance Service Corps of Retired Executives (SCORE) SBA resource partner dedicated to entrepreneur education and formation, growth, and success of SB National Center for American Indian Enterprise Development Committed to Business Development and developing American Indian economic self-sufficiency through business ownership Veteran s Corporation Provides VOSB & SDVOSB with access to capital, entrepreneurial education, electronic marketplace, access to services, & business networking Women s Business Center National network of educational centers to assist women establish & develop their business 8
10 Planning Process for Outreach Events Outreach is part of strategic market research Understand marketplace Network Find opportunities outside your office Identify potential new sources of supply What is the Return on Investment? What are your weak areas? Focus where you can get best return for your time & efforts 9
11 Planning Process for Outreach Events, Cont 10
12 Hosting an Outreach Event 1. Plan Budget 2. Select Theme 3. Solo or Joint Event 4. Set Date & Location 5. Set Agenda 6. Develop Participant List 7. Publicize 8. Conduct Event 9. Conduct After- Action Meeting 11
13 Ways to assist Small Business to develop a Market Strategy Do s Don ts 12
14 Government Misconceptions on Communication: Myth Busters Situation The Contracting Officer cannot meet with a potential offeror one-on-one, but the PM can. In the pre-solicitation period, a vendor who provides information risks being excluded from the resulting solicitation due to organizational conflict of interest (OCI) concerns. While the PM typically talks to Industry about technical requirements, it should be the Contracting Officer s responsibility to get feedback on pricing, performance metrics, evaluation criteria, and other contractual issues. Industry days are of low value because vendors won t provide useful information in front of competitors. Members of the Acquisition Team, including the Contracting Officer and PM, should try to make procurements protest-proof. Based on information gathered from Industry, the Acquisition Team may decide to take a different approach than the one originally planned, in order to increase competition, provide for more small business participation, achieve lower prices, or better define the technical requirements. Source: 13 Myth Or Reality?
15 Vendor Misconceptions on Communication: Myth Busters 2 Situation The best way for vendors to market their company s capabilities to the Government is to present directly to the Contracting Officer. When vendors meets with an agencies technical staff, it is best to bring only business development and marketing people to present a good sales strategy. Myth Or Reality? Attending an industry day is waste of time and resources for vendors because the Government only repeats what is in the written solicitation. A vendor providing early and specific information to the Government can assist them in better defining requirements. Government personnel cannot be trusted with my proprietary data so a vendor should never disclose this information in a one-on-one session. A vendor should read the entire solicitation and tailor its proposal to its specific solution while considering the evaluation criteria, proposal instructions, and specific requirements of the solicitation to which they are responding. Source: 14
16 Match SB Capabilities w/appropriate customer Make small businesses aware of activity s rules of engagement Match with appropriate contracting personnel Match with appropriate customers 15
17 Subcontracting Plans Determine the need for subcontracting plan and appropriate clauses; Identify the types of subcontracting plans; Identify the required elements of a subcontracting plan; Describe the process for reviewing a subcontracting plan; Identify required documentation related to subcontracting plan reports and submission; Identify the process to evaluate prime contractor compliance with the subcontracting plan; Describe the review and rating process of a prime contractor s SB program 16
18 What is a Subcontract? 17
19 When is a Subcontracting Plan Needed? Plan No Plan 18
20 FAR & DFARs Clause Applicability Normal Clauses to use* FAR , Utilization of Small Business Concerns Comprehensive SubKt Plan Test Program Clauses to use FAR Accelerated Payment to SB Subs FAR , Small Business Subcontracting Plan** FAR , Liquidated Damages Subcontracting DFARs Small Business Subcontracting Plan** Optional , Incentive Subcontracting Program 19 FAR , Utilization of Small Business Concerns FAR , Small Business Subcontracting Plan DFARs Small Business Subcontracting Plan (Test Program) * Note: variations with Alternates not reflected in chart; ** See DARS O0014 for deviations
21 Types of Subcontracting Plans Commercial Comprehensive Small Business Subcontracting Test Plan Master Individual 20
22 Types of Subcontracting Plans One (1) plan for one (1) contract Goals for percentage (%) and dollars ($) based on planned subcontracting Individual Covers entire contract period, including options Requires Individual Subcontracting Reports (ISRs) semi-annually Requires Summary Subcontracting Reports (SSRs) annually** Only CO at activity can approve an individual plan **See DARS 2013-O0014 for submission changes 21
23 Types of Subcontracting Plans Can be developed on plant/division basis Effective three (3) yrs after Administering Contracting Officer approval (IAW DFARS) Master Contains all elements of individual subcontracting plan (except goals) Goals individually negotiated for each applicable contract Approved master plan with goals becomes Individual Subcontracting Plan upon contract award 22
24 Types of Subcontracting Plans Preferred for contractors furnishing commercial items Applies to entire production of commercial items sold by either entire company or a portion thereof (division, plant, or product line) Commercial Based on contractor s fiscal year Annual plan (applies to all government contracts in effect) Contains mandatory elements 23 Requires SSR annually
25 Types of Subcontracting Plans Test program for negotiation of comprehensive subcontracting plan May be for a division, plant, or corporation Comprehensive Small Business Subcontracting Test Plan Annual plan (applies to all DoD contracts in effect during FY) Only DCMA is delegated authority to negotiate plan and perform surveillance review functions (with input from departments/agencies) Ends 31 Dec Requires SSR semiannually
26 11 Elements of Subcontracting Plan 1. Goals - Separate goals for each category 2. Total Subcontract Dollars To include total dollars for each category 8. Outreach efforts 7. Administrator POC info and duties 9. FAR , Utilization of Small Business Concerns, in subcontracts (flowdown) 10. Reporting Requirements ISR/SSR in esrs. See (a)(10) 3. Principle type of supplies/ services 4. Method used to develop goals 6. Indirect Costs included in goals and method used to determine % of indirect costs incurred by SB categories 5. Method used to ID potential sources Record Maintenance Description of types of records, procedures to comply with goals in plan, description of efforts to locate sources and award subcontracts
27 Responsibilities in Review of Subcontracting Plan Responsible to require, review, negotiate, approve, and distribute subcontracting plans Supports Contracting Officer and Administrative Contracting Officer Assists in evaluations Contracting Officer Small Business Professional Administrative Contracting Officer (ACO)/DCMA Assists in determining acceptability provides comment to KO SBA PCR/CMR 26
28 Pre-Award Review Subcontracting Plan CO considers plan for particular acquisition Ensures plan contains all eleven (11) elements Ensures goals are attainable and reasonable Look at offerors previous history involving small business Available pool of eligible contractors ACO, SBP, SBA PCR assists CO in reviewing plan 27
29 Post-Award Review Subcontracting Plan Compliance 28 Conduct compliance reviews -Contracting Officer -ACO -SBP -SBA PCR/CMR
30 Post-Award Review Subcontracting Plan Compliance Enforce terms of the contract (feedback from administering contracting officer) Ensure that contract in FPDS indicates Subcontracting Plan is required Acknowledge receipt of or reject ISRs and/or SSRs in esrs Initiate action to assess Liquidated Damages, when justified Monitoring, evaluating and documenting contractor performance against subcontracting plan Send SBA (Area Director, Office of Government Contracting & Procurement Center Representative) copy of contract Post Award CO Responsibilities 29 Furnish documentation/information on contractor s performance/compliance with plans under previous contracts (needs to be documented in CPARS)
31 Post-Award Review Subcontracting Plan Compliance, cont. Whether contractor met goals at contract completion (if not, why) Whether contractor s failure to comply resulted from a lack of good faith effort Extent to which contractor is meeting goals in plan Performance/ compliance assessment against subcontracting plans Whether contractor is submitting ISRs and SSRs and reviewing ISRs submitted by its subcontractors 30 Whether contractor s efforts to ensure participation are in accordance with subcontracting plan Whether contractor is requiring its subcontractors to adopt similar plans
32 What s new in SB SBA s Final Rule at 78 FR 42391, dtd July 16, 2013 Implemented Sections 1321 and 1322 of the SBJA of 2010 Section 1321 requires SBA to promulgate regs on subcontracting compliance relating to SB concerns, including compliance responsibilities between contracting, SB, and Program offices 31
33 SBA s Final Rule at 78 FR 42391, dtd July 16, 2013, cont. Section 1322 requires: Primes make good faith efforts to utilize proposed SB subs during contract performance to the same degree that prime contractor relied on the SB in preparing the proposal. If not then prime must explain to KO in writing why Prime notify KO when payments to SB sub are 90 days or more past due Clarifies that KO is responsible for monitoring and evaluating SB SubK plan performnace 32
34 SBA s Final Rule at 78 FR 42391, dtd July 16, 2013, cont. Implemented following changes: KO authorized to establish subcontracting goals in terms of total contract dollars in addition to the required total subcontracted dollars Subs allowed to discuss payment or utilization matters with KO Primes required to assign NAICS codes to Subs Prime shall submit corrected esrs reports w/in 30 days after receiving the KO s notice of report rejection 33
35 SBA s Final Rule at 78 FR 42391, dtd July 16, 2013, cont. Primes required to notify unsuccessful offerors for subcontracts >$150K in writing. Desired <$150K Primes must submit a SubK Plan when mod causes contract value to exceed the SubK Plan threshold ($650K) KOs have discretion to require a Subk plan in instances whether a SB re-represents itself as an other than small Guidance to KO on considering SB subcontracting as an evaluation factor Primes w/subk plans required to submit SB SubK reports for individual orders on annual basis 34
36 SBA s Final Rule at 78 FR 42391, dtd July 16, 2013, cont. Amends Clause to eliminate: Submittal for separate SSR for construction and related maintenance and repair contracts to each DoD component and The requirement for the contractor to submit semi-annual SSR for DoD and NASA These reports are no longer necessary due to increased efficiencies of esrs. Only submit annual report 35
37 2013 NDAA Section 1651 Mandated limitations on SubK for set-asides be evaluated on overall award amount the prime spends on subs SBA s proposed rule (RIN 3245-AG58) would exempt similarly situated SB subs from the requirement that a SB prime contractor not expend on subs for more than 50% of the amount paid to prime Similarly situated subs would be exempt for the limitations of subcontracting calculation Similarly situated entity participates in the same SB program that the prime also participates in and which qualified the prime contractor to receive award. (ex: HUBZone set-aside and HUBZone sub or SB set-aside and SB sub) SB prime can sub to SB and have it count as part of the 50% being performed by prime 36
38 2015 NDAA Section 821 DFARS 219.7, DoD Comprehensive SB Subcontracting Test Program extended from 31 Dec 2014 to 31 Dec 2017 DoD Class Deviation issued 12/24/14 Section 825 Sole source authority for WOSB/EDWOSB Has not been changed in FAR yet 37
39 Review and Justification of Pass- Through Contracts (FAR Case ) Expected Final Rule issued in March 2015 Amend FAR adding paragraph h Offeror informs KO that they intend to subcontract >70% of total cost of work KO shall consider availability of alternative contract vehicles and feasibility of contracting directly with a sub that will perform bulk of work KO shall determine, in writing, that selected approach is in best interest of the gov t KO shall document the basis for such determination FAR 19 actions are exempt 38
40 QUESTIONS 39
41 Contact Information Kevin Linden Defense Acquisition University (DAU) 40
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