Tag Archives: small business contracting goals

HUBZone Program Updates And Flexibilities During COVID-19

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Image: SBA

Summarizing the following updates of interest to HUBZone enterprises:

I. HUBZone Program flexibilities during COVID-19

II. HUBZone Program updates related to a regulation change

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U.S. SMALL BUSINESS ADMINISTRATION (SBA)

 I.  HUBZone Program flexibilities during COVID-19

How can firms maintain the 35% HUBZone residency requirement if some employees are college students whose residence hall has closed?  SBA recognizes that some HUBZone employees are students who have been called home to locations no longer in a HUBZone, even though they continue to work remotely, impacting firms’ ability to maintain the 35% HUBZone residency requirement.  SBA will determine affected firms’ compliance with the 35% HUBZone residency requirement by reviewing documentation showing where the impacted employee lived prior to the COVID-19 response measures being put in place. Accordingly, a firm that has a HUBZone  employee that was required to move from student housing to a non-HUBZone location AND continues to work for the HUBZone firm, the firm may continue to count that employee as a HUBZone resident by providing documentation showing:  1) the university/college closed the student’s residence and 2) the employee has been maintained on the payroll.  This applies only to students who, at the time of the firm’s application for certification or recertification, were already on payroll and had residency established prior to the university closing student housing. 

How can firms maintain compliance with the Principal Office requirement if their employees are required to telework?  SBA recognizes that if all of a firm’s employees are required to telework in response to the COVID-19 pandemic, this might impact a firm’s ability to comply with the HUBZone program’s principal office requirement.  In response to this concern, SBA will determine affected firms’ compliance with the principal office requirement by reviewing the firm’s compliance prior to the telework measures being put in place. Accordingly, at the time of application for certification or recertification, a firm that has placed its employees on mandatory telework will have to provide documentation showing where its employees performed their work prior to requiring telework.  Such an applicant will also be required to provide a signed statement that: the firm put all their employees on telework associated with social distancing in response to the COVID-19 pandemic;  the teleworking measure is temporary in nature; and the employees will return to their normal work location once the teleworking measures have been lifted.

How can firms maintain compliance with the requirement for uninterrupted and continued employment for “Legacy HUBZone employees,” as outlined in the HUBZone regulations at 13 C.F.R. 126.200(d)(ii)(3), if employees are laid off or on extended sick leave?  The revised HUBZone regulations, which became effective December 26, 2019, allow firms to count “Legacy” HUBZone resident employees as permanent HUBZone resident employees if they are able to demonstrate that the employee was a HUBZone resident for 180 days prior to and for 180 days following the firm’s HUBZone certification or recertification.  In addition, the requirement states, “The certified HUBZone small business concern must maintain records of the employee’s original HUBZone address, as well as records of the individual’s continued and uninterrupted employment by the HUBZone small business concern, for the duration of the concern’s participation in the HUBZone program.”  SBA recognizes that many firms have placed employees on extended (unpaid) sick leave status or are contemplating layoffs. SBA will allow HUBZone companies to place an employee in a temporary non-paid status such as FMLA to care for themselves or a sick family member during COVID-19 if the firm attests to their intent to put such individuals back on payroll after the period of extended sick leave. However, there is no such exception for employees that have been laid-off.  If a firm lays off an individual, that individual cannot be counted as a “legacy HUBZone employee” for any future HUBZone certification or recertification.

Can the HUBZone Program expedite my application for certification?  SBA may expedite the application of any firm that submits a complete package for certification and indicates that they intend to respond to a specified solicitation that relates to COVID-19. 

Can the HUBZone Program waive or reduce the 35% residency requirement?  This statutory requirement would necessitate Congressional action to change

     II.  HUBZone Program updates related to a change in regulations

When and why did SBA propose new rule changes to the HUBZone program? The SBA proposed new regulations to make it easier for small businesses to participate in the HUBZone program. These changes will make the program more attractive for small businesses to invest in HUBZones and hire HUBZone residents, providing greater impact to communities and making it easier for federal agencies to meet their goal to award 3 percent of contracts to certified HUBZone small businesses.  The rule change was published in November 2019 and took effect December 26, 2019.   

What are the new rules around recertification? All firms will be required to undergo an annual recertification rather than a triennial recertification, with a full documentation review taking place every three years.  Once certified, a firm is eligible for all HUBZone contracts for which the business qualifies as small, for a period of one year from the date of its initial certification or most recent recertification (unless the concern acquires, is acquired by, or merges with another firm during that period).   Prior to this change, in order to be eligible for a HUBZone contract, firms had to prove their HUBZone eligibility at both the time of offer and the time of award, lengthening the procurement process for HUBZone firms uniquely among all small businesses—and serving as a disincentive for federal agencies to contract with HUBZone companies. 

When and how will annual recertification begin? SBA has experienced a delay in the implementation of our new annual recertification process.   Firms which, based on the prior triennial recertification schedule, were due for recertification in 2020 will be contacted automatically by the HUBZone Certification and Tracking System (HCTS) and will be required to recertify on the anniversary date of their initial certification.  (For example, if a firm was initially certified on December 1, 2017, the firm will receive a notice from HCTS that it is due to recertify its HUBZone status within 30 days of December 1, 2020.)   All other firms (which were not scheduled to recertify in 2020 under the triennial recertification rules) will continue to be considered eligible as of the date of their initial certification or most recent recertification, and must be prepared to prove their eligibility at that time if their HUBZone status is protested in connection with a HUBZone solicitation issued after December 26, 2019.    Until such time as we have introduced a fully automated recertification process for all firms, we will also allow firms to voluntarily recertify on the anniversary date of their initial certification, if they choose to do so. We will advise firms within the next two weeks regarding the process for voluntary recertification on their anniversary date.

Are Governors now permitted to ask SBA to designate HUBZones?  A new Governor-designated covered areas initiative that became effective on January 1, 2020, represents an opportunity to expand the HUBZone program to reach more distressed rural communities.  The new authority allows state governors to petition SBA to designate as HUBZones rural areas with populations under 50,000 and unemployment levels of 120 percent of the U.S. or state average.  SBA will provide updates and update the HUBZone maps to reflect newly covered areas.

Are there other changes to the HUBZone maps? SBA has frozen the HUBZone maps through 2021, until the results of the 2020 Census are available. This will provide the program and participating small businesses with an opportunity to transition to a new requirement to update the maps and designations on five-year intervals, starting after the 2020 Census. Five-year HUBZone updates will enable small businesses to plan and invest in their HUBZone communities without fear that their designation may change from one year to the next, thus providing stability for both the community and HUBZone businesses. While the maps are frozen, no new Qualified Non-Metropolitan Counties, Qualified Census Tracts, or Redesignated Areas will be removed from or added to the maps. However, SBA will continue to add locations approved through the new Governor-designated covered areas initiative, qualified base closure areas, qualified disaster areas, and Indian lands, as any new data is received.

How has the definition of the Principal Office changed?   A new provision in the HUBZone regulations allows small businesses that invest in HUBZones by purchasing a building or entering a long-term lease (of 10 years or more) to maintain HUBZone eligibility for up to 10 years, even if at some point the office location no longer qualifies as a HUBZone. This provision does not apply to offices located in areas categorized on the HUBZone map as Redesignated areas.

Are there changes to the 35% HUBZone employee residency requirement?  The new rule allows HUBZone companies to retain long-term “Legacy” HUBZone resident employees as permanent HUBZone resident employees, under certain circumstances.  An employee who resides in a HUBZone for at least six months (180 days) at the time of certification or recertification, and continues to reside in a HUBZone for at least six months (180 days) after such time, may continue to be considered a HUBZone resident so long as they are continuously employed by the firm, even if he/she moves to a non-HUBZone area, or if the area of his/her residence loses HUBZone geographical eligibility. If the firm wants to count such a “Legacy” employee as a HUBZone resident for the duration of the individual’s employment, then at the time of any subsequent recertification, the firm will be required to identify any such employee and provide supporting documentation demonstrating that the individual resided in a HUBZone for 180 days before and after certification and that the individual has been an employee of the firm for the entire period of time since the firm’s certification.

How may I obtain help or learn more about the HUBZone Program?  The following resources may be accessed for additional support:

GSA Announces STARS III Government Wide 8(a) IT Acquisition Competition

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Image: “GSA Interact”

“FEDSCOOP”

The General Services Administration released a draft solicitation Friday to replace an expiring governmentwide acquisition contract (GWAC) for small IT businesses.

The 8(a) Streamlined Technology Acquisition Resource for Services (STARS) III GWAC will replace its predecessor, 8(a) STARS II, when that ends Aug. 30, 2021.

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“Agencies will issue task order requests via 8(a) STARS III for information technology services from active participants in the Small Business Administration’s 8(a) Business Development program for startups.

The contract will primarily allow agencies to procure custom computer programming; computer systems design; computer facilities management; computer-related services like disaster recovery and software installation; data processing and hosting; and emerging technology like artificial intelligence, blockchain and quantum computing. But ancillary support like training and hardware acquisition, including telecommunications infrastructure, will also be covered by 8(a) STARS III.

The contract has a $20-billion ceiling and a five-year base period with one three-year option.

Awardees are guaranteed a $250 minimum for task order work, and prime contractors will periodically be reviewed.

In February, STARS II was included in the Department of Homeland Security’s EAGLE Next Gen portfolio of “best-in-class” contract vehicles being used for services like cybersecurity staffing at its Security Operations Centers.”

Department Of Commerce “Solutions and Partners” Draft RFP

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“FEDSCOOP”

Lifecycle support of websites, operations and maintenance support for legacy Minority Business Development Agency data, MBDA MedWeek and national conference support, Salesforce integration services, project management, and SharePoint support.

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“The Department of Commerce wants industry’s input on a “potential acquisition strategy” for information technology support in six areas.

DOC issued a request for information Monday on the chief information officer’s Solutions and Partners (S&P) requirement, which aims to help the Office of Enterprise Services and Solutions provide IT departmentwide.

Vendors would be expected to take an agile approach improving existing solutions and developing new ones, regularly communicate project updates and work with agencies so they can request products.

Respondents are asked to submit performance measures, as well as potential pricing structures and contract types.

A solicitation may come out of the RFI with the intent of DOC making a contract award.”

Insights to Succeed In Small Business Federal Government Service Contracting

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SMALL TO FEDS” By Ken Larson

Service contracting to the federal government is a natural venue for small business. It does not require a product with a niche market or capital intensive manufacturing facilities. 

Here are 8 insights for planning your success in small business federal government service contracting”

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“Service contracting does require skilled management and labor resources capable of performing a scope of work for which the government has identified a need and for which outsourcing to an industry contractor has been selected as the means to fulfill that need. The venue demands strong human resources management, industry teaming and an enhanced business system to price, account and bill on a job cost basis under government service contracts. 

Small enterprises in the commercial services market are tempted to immediately begin bidding jobs in federal government contracting, approaching them like commercial efforts. They quickly find there are major differences in the way the government contracts are marketed, proposed, priced and performed. These differences are not “Rocket Science” but it is necessary to learn about them and plan for success.

1. UNDERSTAND THE LENGTHY SALES CYCLE

What immediately becomes apparent to the commercial small business when entering the federal contracting service contracting market is that the sales cycle is a long one and the preliminary steps are often hidden from public view. 

Often misunderstood, is that much has occurred in the way of marketing activities by companies in advance of notices formally published by the government on FEDBIZOPPS. By the time the formal, solicitation is published it is too late to market for setting a procurement aside for a small business designation if it has not already been established as such. 
 In addition, formal solicitation publication closes the window on self-marketing by HUB Zone and 8(a) firms for set asides to them individually without competition. In short, businesses have been marketing for the requirement long before it became formally announced at FEDBIZOPPS. For additional details please see:

What Small Business Should Know About FEDBIZOPPS

Even if a company has had exposure to an agency, marketed on a program in advance of its announcement or become a member of an industry team to bid the job, the proposal and award process, to include negotiations and start up, can easily consume 90 to 120 days as a minimum. For major programs the process often exceeds 6 months in duration. Planning must occur for the expense associated with supporting such lengthy marketing efforts before any cash flow results. 

2. APPRECIATE APPLICABLE DEFINITIONS, ROLES AND REGULATIONS

Participation in the government contacting market can involve participating as an individual, becoming a subcontractor as a company or seeking a prime contractor role. Those with product research and development support needs can participate in venues like Small Business Innovative Research (SBIR) and Mentor/Protege Programs. A GSA Schedule also provides opportunities for those in finished product sales. Please refer to the following articles for explanations of these roles and program definitions:

What Is A Small Business Federal Government Contractor?

Techniques For Product Development

Small Business Government Grants Versus Direct Contracts

Achieving and Utilizing A GSA Schedule

3. CONDUCT MARKET RESEARCH

If you are relying on FEDBIZOPPS or like sites for new business you will be very disappointed. Pre-solicitation notices do have promise, but you have to get inside an agency to find out who has the funding, the need and the decision-making authority.  It is rarely the contracting officer who posts the notice who has these responsibilities.

 Pre-solicitations are alerts to industry, attempts to gauge industry interest or a way of “Kicking the Can Down the Road” until funding becomes available.  These notices are an indirect way of saying, “Come Visit Me and tell me about your company”, or “Send Me your CAPE”. The full formal notification will come out at a time to be determined by when the agency gets the funding and how much interest there is in the contractor community. A schedule for when the formal bid notice will occur is rarely posted. 

4. PROMOTE CAPABILITIES

Develop a capability statement (CAPE) to respond to government postings and mail directly to government agencies and to large corporations doing business with the government.

A capability statement is a necessity as a standalone marketing tool for dealing with government agencies and contractors. It should be short (no more than 2 pages) and hard hitting, containing all the information necessary for a government contracting officer or company buyer to place an order, as well as your registration information at local, state and federal web sites, your NAICS Codes and contact information. 

Insert your CAPE in the tab at your web site where you discuss your background information and your government registrations.

See the second, vertical, Box Net “References” cube in the left margin of this site for an example of a good service contractor capabilities statement in the public domain. 

5. ACQUIRE PERSONNEL STRATEGICALLY

Start up service contractors face the dual problem of establishing the enterprise with the one-time, non-recurring activities necessary to get the operation underway and at the same time acquire the core management talent and subsequent help as the business grows. 

Even established companies who enter government service contracting find they cannot sustain a work force for large scale agency programs until the contracts are in hand to finance them. 

A core team is an absolute necessity; it may be small and the business proposals may be few at first. But the core team product must be strategic in terms of high probability marketing to build the company base. 

Supplementary help can be acquired by permanent ads at the company web site for generic skill sets, contingent hire agreements with prospective employees and similar techniques that position the resources on deck for business growth. 

Small businesses commonly utilize contingent hire agreements to locate promising individuals who can bring projects or contacts with them when they join the firm. They are willing to negotiate a prospective wage and salary arrangement in advance of a proposal submission and commit to an offer of employment with benefits and commission should the program be won. They further offer to reimburse the participant for expenses and business related costs during the proposal period, if pre-approved. 

The key to these arrangements is to identify target projects that both you and the candidate can go after, where the candidate is uniquely qualified to

: (1) Help win the job 

(2) Contribute heavily to the proposal. Just bringing someone on who has no ability to offer targets usually does not work. 

Contingent Hire Agreements

6. MAKE ASTUTE BID/NO BID DECISIONS

Government contract proposal preparation is time consuming and can be costly. Meeting the agency Request for Proposal (RFP) requirements with a responsive proposal can be well worth the effort if a winning strategy can be formulated.

When considering submitting a proposal to a given government solicitation, conduct a bid/no bid exercise. By going through that process you will begin formulating your win strategy or you will discover that you should not bid this job for lack of such a strategy. The elements of the process are in the form of questions to ask yourself against topics for key consideration at the following link:

Federal Government Contracting Proposal Preparation

Affirmative or non-affirmative answers to the topical questions and ability to fill in the blanks will drive your decision to bid or not bid a solicitation. 

7. PREPARE YOUR BUSINESS SYSTEM FOR PRICING, ACCOUNTING AND BILLING

To effectively market a federal government contract a small business must sell on the basis of having a business system as well as technical performance infrastructure ready to run the job when a contract proposal is submitted. This dual requirement is where many small businesses fall short in their federal government contract start up planning.

Parallel thinking is required to plan for government project technical effort against a template of necessary business process infrastructure, driven by introducing Federal Acquisition Regulations (FAR) into the company. Key elements of the necessary business system infrastructure are discussed in the following articles:

Establishing FAR and CAS Compliant Small Business Systems

Managing Risk In Small Business Systems Development

8. PROPOSE TO WIN BY MEETING THE PAST PERFORMANCE CHALLENGE

As a small business begins the proposal submission process to federal government agencies or to prime contractors, the past performance challenge is major. By definition a start-up company in government contracting has no direct government agency past performance projects to site in meeting the requirement in requests for proposals (RFP’s) for historical references to similar projects in terms of size, duration and complexity 

So how can a new organization or one that is new to government contracting muster a response to the past performance challenge?

The answer lies in historical projects that may be similar in the commercial arena and a high quality proposal that clearly demonstrates an understanding of the requirement at hand, a unique and cost effective project plan and high performing personnel and/or products tailored to the statement of work to offset an interim, light past performance record. 

For further details see the following article:

The Small Business Federal Government Contracting Past Performance Challenge

SUMMARY

This writing has conveyed insights for planning participation strategically in the small business federal government service contracting market. 
Consider the lengthy sales cycle and the roles your enterprise can best play in the venue. Conduct thorough market research, promote your capabilities endlessly and make astute bid/no bid decisions. 

You must acquire core and supplementary help as business growth permits by using methods to preposition human resources. Prepare dynamic proposals with unique project plans to meet the past performance challenge, then execute your project plans to succeed. ”

https://www.smalltofeds.com/2010/11/insights-to-succeed-in-small-business.html

DHS Small Business Chief Gives Insights into Winning Contracts

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DHSSmallContracts

“NATIONAL DEFENSE MAGAZINE”

“Newcomers are welcome,” Kevin Boshears, director of the office of small and disadvantaged business utilization, said at an Armed Forces Communications and Electronics Association homeland security conference.

DHS exceeded its small business contract award goals in fiscal year 2014, he said. Thirty-five percent of DHS prime contract awards went to such firms, he said. It also doubled its goal for disabled veteran-owned company contracts by reaching 6 percent for the first time. Historically Underutilized Business Zones (HUBZones) contracts also reached an all-time high of 3.9 percent, he added.

About 13,000 companies had DHS contracts in 2014. Of those, 9,400 were small businesses with prime or non-prime contacts. And of those, almost 1,800 of them earned their first DHS award last year.

One of the key takeaways from these statistics is that: “You don’t have to have DHS past performance to secure a contract,” Boshears said.

“We have prime and subcontracting opportunities for small businesses. It’s not one or the other. It’s both,” he added.

Once a contract comes up, the office has to be convinced that small businesses are capable of serving as a prime contractor. If that is the case, it sets the award aside for them.

When moving on to full and open competitions where it expects to award the contract to larger companies, it facilitates a mentor-protégé program for the small businesses or paves the way for subcontracting opportunities.

For those companies that want to break into the DHS market, Boshears said it was no different than selling to any other agency or customer: they must understand the market and customer and they must put themselves in a position to compete.

As for the latter, he has queried thousands of small businesses to find out what steps they took to grab their first federal contract, and four answers have come up repeatedly.

The first hallmark is that they do their homework. Boshears recalled receiving a phone call recently from a small business owner who was trying to find out about an overdue contract award, which turned out to be from the FBI. He had to explain that the agency was not part of DHS.

“I didn’t see his face but he felt pretty sheepish when I told him,” he said. There is a wealth of information at the DHS small business website, he noted.

Secondly, successful companies understood the differences between all the contract vehicles, he said. Those include: General Services Administration schedules; open competitions on FedBizOps; and multiple award, indefinite delivery, indefinite quantity contracts.

“You have to understand the differences because it helps you position yourself,” he said. If, for example, a company offering a product does its homework and discovers that for the past five years DHS has acquired the same item through the GSA schedule, “that’s an automatic clue,” Boshears said.

The third step successful companies took was participating in various forms of networking. Industry conferences are an obvious example of this, but it can be less formal settings such as email exchanges.

“Some way or another, these firms participate in some kind of network,” he said. “The key is getting information that is of use to you.”

The last element is that they understand all the facets of teaming.

There are many ways to do this. A small business can ask a larger one for backup in case it wins an award. It can subcontract with a prime. Or it can form a joint venture.

In that case, Boshears recommended being very clear in the proposal as to which company intends to perform which tasks.

“When we review them, I can say that we truly are neutral. What we’re looking for is the best offer and the best value to the government that is advantageous to what we’re trying to do,” he said.

“These four things when all taken together leads to positioning yourself to participate,” he said.
The most common path for small businesses to put their foot in the door at DHS is to first be a subcontractor. “It’s basically finding a niche piece of work that you’re confident you can perform, and proposing what you have to offer to companies that anticipate submitting an offer.”

The small business office also posts on its website a monthly forecast of opportunities, and hosts a monthly outreach program, where companies can sign up for 15 minute pre-arranged meetings at the Homeland Security Acquisition Institute with small business specialists from the department’s 22 agencies, he said.”

http://www.nationaldefensemagazine.org/archive/2015/April/Pages/DHSSmallBusinessChiefGivesInsightsintoWinningContracts.aspx