Tag Archives: SBA

SBA: Federal Government Hits Some Prime Small Business Goals, Falls Short On Others

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SBA Goals

“WASHINGTON TECHNOLOGY”

“Overall, the government met and even exceeded its goal for small business prime contracts last fiscal year, the $100 billion mark for the first time.

But agencies fell short of their overall subcontracting goal.”

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“During fiscal year 2017, agencies bought $105.7 billion in goods and services from small businesses, which captured 23.9 percent of prime contract dollars. That proportion was slightly below fiscal 2016 when they captured 24.34 percent. Those numbers do not include subcontract dollars.

But the total dollars — prime and subcontracted — are higher with $105.7 billion in fiscal 2017, compared to $99.1 billion in 2016.

The Small Business Administration gave “A” grades to 20 agencies. Nine of those got an “A-plus” and 11 with an “A” grade. Two agencies received a “B” grade and one received “a” C grade — the U.S. Agency for International Development.

While the overall goal of 23 percent was surpassed, two specific small business categories fell short of their goals.

Women-owned small businesses have a goal of 5 percent but the government only spent 4.71 percent or $20.8 billion with these businesses. The fiscal 2017 percentage also is slightly below 2016 when women-owned small businesses picked up 4.79 percent of prime contract spending.

Results for Historically Underutilized Business Zone companies fell short. HUBzone firms won just 1.65 percent, or $7.3 billion, against the 3 percent goal. This also was a drop from fiscal 2016 when these businesses captured 1.67 percent of prime contract dollars.

Small disadvantaged businesses won 9.1 percent of the prime contracts, worth $40.2 billion in fiscal 2017. In fiscal 2016, they won 9.53 percent, a slight drop. The goal is 5 percent.

Only service-disabled, veteran-owned small businesses saw their percentage increase in fiscal 2017. They won 4.05 percent of prime contract dollars or $17.9 billion, compared to the 3.98 percent they won in 2016. The goal is 3 percent.

The overall subcontracting goal of 31.95 percent was not achieved. Small businesses won 31.4 percent of subcontract dollars.

Only women-owned and small disadvantaged businesses surpassed their 5 percent goals. Women-owned captured 6.2 percent of subcontract dollars, and small disadvantage captured 5.3 percent.

Service-disabled, veteran-owned business won 1.9 percent of subcontract dollars and HUBZone captured 1.3 percent. Both have a 3 percent subcontracting goal.

Agencies receiving A-plus:

  • Commerce Department
  • Education Department
  • Homeland Security Department
  • Housing and Urban Development Department
  • Labor Department
  • Interior Department
  • Nuclear Regulatory Commission
  • Office of Personnel Management
  • Small Business Administration

Agencies getting an A:

  • State Department
  • Transportation Department
  • Treasury Department
  • Agriculture Department
  • Environment Protection Agency
  • Defense Department
  • General Services Administration
  • Energy Department
  • National Science Foundation
  • Justice Department
  • Social Security Administration
  • NASA

Agencies getting a B:

  • Health and Human Services Department
  • Veterans Affairs Department

Agency with a C:

  • U.S. Agency for International Development”

https://washingtontechnology.com/blogs/editors-notebook/2018/05/sba-2017-small-business-goals.aspx

 

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SBA Rejects Major Changes in Size Standard Methodology

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SBA Size Standards“SMALLGOVCON.COM”

“The SBA’s commentary accompanied the publication of the SBA’s revised Size Standards Methodology White Paper, which is now available on the SBA’s website

The White Paper explains how the SBA establishes, reviews, and modifies its small business size standards.”

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“In commentary published in the Federal Register last week, the SBA rejected (among other things) recommendations that it use average employee count to evaluate the sizes of construction firms and that other firms’ sizes be measured by profits or net worth instead of average annual receipts.

Way back in October 2009, the SBA solicited commentary on the White Paper in effect at the time.  The SBA also sought comments on various policy questions the SBA must consider when developing size standards, such  as “how high a small business size standard should be, should there be a single measure of business size for all industries (i.e., employee or annual receipts)” and so on.  The SBA accepted comments until the end of the 2015 fiscal year.

Now, some 8 1/2 years after the SBA first sought public comments, the SBA has published its responses to those comments.  If you’re something of a size policy nerd (I’ll admit to it!), the SBA’s Federal Register commentary is worth reading in its entirety.  But for those who may not put themselves in that category, here are some of the highlights:

  • Profit measure rejected.  The SBA rejected a suggestion to establish size standards based on gross profits rather than average annual receipts or employee count.  “If a size standard were established in terms of gross profits,” the SBA wrote, “a company with hundreds of millions in revenues and thousands of employees can qualify as small under a profits-based size standard.”  In fact, the SBA said, “[i]t is not unusual for very larger companies to have little or negative profit over the course of business cycles.”  Plus, “a firm’s profits can be manipulated and thus would be an inconsistent and misleading measure of [a] firm’s size for size standards purposes.”  Probably once a month or so, I hear from a business owner who asks whether size standards are already based on profits.  It’s a rather common misconception.  But not only are profits not the measure of small business size, the SBA has no plans to head in that direction.
  • Employee count for construction rejected.  The SBA also rejected a suggestion to use average employee count, rather than average annual receipts, to measure the sizes of construction companies.  “Under SBA’s prime contractor performance requirements . . . a general construction company needs to perform as little as 15 percent of the value of the work and a specialty trade contractor can perform as little as 25 percent of the work with their own resources,” the SBA wrote.  “SBA is concerned that employee based size standards could encourage construction companies near the size standard to subcontract more work to others to bypass the limitations on subcontracting and remain technically a small business.”  The SBA concluded: “[r]eceipts, as a representative of the overall value of a company’s entire portfolio of work in a given period of time, are a better measure of the size of a construction company to determine its eligibility for Federal assistance.”
  • Net worth limits rejected.  The SBA similarly rejected a proposal to base size standards on net worth, saying that such a measure “is not practicable.”  The SBA explained that “[a] company’s net worth can be affected by a number of things, such as debt, repurchased corporate stock, etc.”  Furthermore, “data on net worth is not available by industry,” which would make it impossible for SBA to fairly establish size standards based on that measure.
  • No mid-tier or “micro” size standards.  The SBA also rejected calls to establish new size standards for “mid-sized” businesses (certain companies that have outgrown the small business size standard) and “micro” businesses (such as those with less than $100,000 in sales or fewer than 20 employees).  In rejecting these proposals, the SBA cited “significant complexity,” a “much more burdensome system and reporting requirements” and the fact that “Congress would need to establish new small business procurement goals for each tier to ensure that small businesses at different tiers have a fair access to Federal contracts.”

The SBA’s commentary is chock-full of interesting information, and not everything is the SBA saying “no.”  The SBA does make some proposed improvements and refinements to its size standards methodology.  The SBA also seeks public commentary on a variety of important size questions, such as whether there would be a uniform maximum size standard, and whether the SBA should consider lowering any size standards.  Public comments are due by June 26, 2018.”

http://smallgovcon.com/statutes-and-regulations/sba-rejects-major-changes-in-size-standard-methodology/

 

US Small Business Administration Offers Help to Veterans

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“MINNEAPOLIS STAR TRIBUNE”

“The U.S. Small Business Administration has resources available for veterans who want to start their own businesses or for small businesses that may have been affected by employees who have been deployed.

The numbers are substantial, according to the SBA: Nearly one in 10 small businesses in this country are veteran-owned; veterans are 45 percent more likely to be self-employed than non-veterans; and businesses owned by female vets have increased 297 percent from 2007 to 2012.

The SBA’s website has collected a list of programs that can offer help, especially in navigating the complexities of returning home for members of the Guard or Reserve after being deployed.

It has information on starting a business, financing, mentoring and training and selling to the government. It can be found on the website Veteran Owned Businesses

One example of a resource is the Military Economic Injury Loan, which provides funds to eligible small businesses to meet operating expenses when an essential employee is called to active duty. The filing period for businesses to apply begins on the date the essential employee is ordered to active duty and ends one year after the essential employee is discharged or released from active duty.

Another aspect to consider are laws that make federal contracting more attractive to veterans, particularly those with a service-connected disability. The Veterans Entrepreneurship and Small Business Development Act of 1999 established an annual government-wide goal of awarding at least 3 percent of all federal contracts to small businesses owned or controlled by service-disabled veterans.

There’s also Boots to Business, a two-step entrepreneurship training program open to service members and their spouses. The two-day course introduces participants to the opportunities and challenges of business ownership. An eight-week online course allows participants to work through the fundamentals of developing a workable business plan.”

SBA Offers Help to Small Business

Defense Officials: Times are Good for Small Business Contractors

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Forbes

Image: Forbes Magazine

“NATIONAL DEFENSE MAGAZINE”

“The federal government overall awarded 24.9 percent of all prime contracts to small businesses in 2014, or about $91.7 billion.

And defense contracts accounted for more than half, at $54.3 billion, a figure that earned the Pentagon high praise from the Obama administration.

Just less than two years ago, the Pentagon warned in a report to Congress that “continued uncertainty will hit smaller, innovative, and niche product companies particularly hard due to a lack of capital resources.”

But Pentagon officials offered a much cheerier outlook last week as they unveiled the results of the fiscal year 2014 small business federal scorecard.

“This is the highest percentage of contracting dollars ever awarded to small businesses since the 23 percent goal was established in 1997,” said Small Business Administrator Maria Contreras-Sweet, who appeared at a Pentagon news conference June 26 with Undersecretary of Defense Frank Kendall.

“Small businesses now are filing more patents than ever,” she said. “So they’re also driving innovation.”

The Pentagon has made a deliberate effort over the past five years to boost small business contracting, said Kendall. The Defense Department’s “better buying power” procurement guidelines specifically promote the use of small businesses, “both for innovation and for efficiency and to control costs,” he said. “Small businesses, particularly in the services industry, tend to be leaner and more anxious to get work, and thus tend to be more economic in many cases for the department.”

Defense officials’ upbeat talk about small business contracting is a far cry from pessimistic forecasts that followed the military spending downturn between 2009 and 2013. CEOs of large prime contractors repeatedly warned that they feared losing small business suppliers, especially those that make specialized defense-unique products.

Under Kendall, the Pentagon’s industrial policy office launched a sweeping “tier by tier” study of the defense supply chain out of concern for the financial health of small suppliers.

Today, there are no reasons to worry, said André J. Gudger, acting deputy assistant secretary of defense for manufacturing and industrial base policy.

“We don’t have a weak supply chain. We have a very healthy one,” he said. “There’s areas of concern that we have that we focus on, but yes, we have overall a healthy industrial base set up from our first tier to our sub tier suppliers.”

Kenyata L. Wesley, acting director of the office of small business programs, credits Kendall’s better buying power for the improved climate. “Better buying power strategically focuses on small business as well as technology and innovation,” he said. “If you look at better buying power 3.0, which is now the third iteration, there’s a lot more initiatives based on small businesses, because we’re not stopping, we’re not taking the foot off the gas. … It’s not a political statement that they’re the economic engines. They’re technology engines.”

Gudger said he continues to monitor the state of the industry. “I’m responsible for the industrial base and ensuring that it’s a modern, healthy, robust industrial base. And we look at the fragility and criticality of all businesses, not just small. That includes the medium and the large, to see where we have critical capability where we might have an industrial base that’s thin or weak.”

Today, he said, “there is no systemic crisis” concerning defense suppliers. “Our industrial base looks very healthy. We have improved it.”

The SBA has programs to help cash-strapped federal contractors, said Contreras-Sweet. One is called “emerging leaders,” she said. “We take experienced companies, as we help them grow to scale, put them through what we call a mini-MBA.” Another is called “quick pay,” aimed at suppliers with cash flow problems.

Defense Department service contracts appear to be the sweet spot for small businesses. About half of all defense contracts are for services. “The Department of Defense made a decision to focus on areas that were very healthy for small businesses,” said Gudger. “We focused on areas such as knowledge base services, electronic and communications, and facilities management.”

In the federal scorecard, the SBA gave the Defense Department an “A” grade. Eighty percent of the grade is based on the actual prime contracting dollars, said John Shoraka, associate administrator for government contracting and business development at SBA. Ten percent of the grade comes from the amount of subcontracting dollars, and the remaining 10 percent is based on subjective factors such as specific leadership efforts.

Shoraka noted that the federal government also broke a new record for contracts awarded to businesses owned by our military disabled veterans. The goal is 3 percent, but in 2014 that percentage rose to 3.7.”

http://www.nationaldefensemagazine.org/blog/Lists/Posts/Post.aspx?ID=1886