Government Contracting Reference Guide
The 8(a) Business Development Program is an important resource for small businesses seeking business-development assistance.
Named for Section 8(a) of the Small Business Act, this program was created to help small and disadvantaged businesses compete in the marketplace. It also helps these companies gain access to federal and private procurement markets.
- The 8(a) Business Development Program is a business assistance program for small disadvantaged businesses. The 8(a) Program offers a broad scope of assistance to firms that are owned and controlled at least 51% by socially and economically disadvantaged individuals.
- Participation in the program is divided into two phases over nine years: a four-year developmental stage and a five-year transition stage.
- Participants can receive sole-source contracts, up to a ceiling of $4 million for goods and services and $6.5 million for manufacturing. While we help 8(a) firms build their competitive and institutional know-how, we also encourage you to participate in competitive acquisitions.
- 8(a) firms are also able to form joint ventures and teams to bid on contracts. This enhances the ability of 8(a) firms to perform larger prime contracts and overcome the effects of contract bundling, the combining of two or more contracts together into one large contract.
- To qualify for the program, a small business must be owned and controlled by a socially and economically disadvantaged individual.
- Under the Small Business Act, certain individuals are presumed socially disadvantaged: African-Americans, Hispanic Americans, Asian Pacific Americans, Native Americans (American Indians, Eskimos, Aleuts, or Native Hawaiians), and Subcontinent Asian Americans. An individual who is not a member of one of the groups listed can be admitted to the program if he/she shows - through a "preponderance of the evidence" - that he/she is socially disadvantaged. For instance, an individual may show social disadvantage due to race, ethnic origin, gender, physical handicap, long-term residence in an environment isolated from the mainstream of American society; or other similar causes.
In addition, a socially disadvantaged individual must show economic disadvantage by submitting a narrative and personal financial documentation about one’s income, assets, and net worth.
Generally, successful applicants must also meet the following additional requirements:
The business must be small according to the Size standards for small business concerns;
The business must demonstrate a potential for success (generally by being in business for, at least, two years);
The business must be unconditionally owned and controlled by
- by one or more disadvantaged individuals who
- are US citizens and who
- are of good character
What happens if a business successfully meets the eligibility requirements? Firms that participate in the 8(a) BD program benefit from the business development assistance provided by the district offices of SBA located around the country. Small business development is accomplished by providing various forms of management, technical, financial and procurement assistance. The program participants are responsible for maintaining their eligibility and self-marketing their products and services to the federal government and the private sector. Under the Small Business Act, participation is limited to nine years and after that time, neither the business nor that individual will be eligible to participate again. In other words, there is a one-time eligibility restriction. Because the program is of a limited duration and has a one-time eligibility restriction, it is important for firms applying to the program to understand the basic eligibility and reporting requirements. Once a firm has established its eligibility, it is required to maintain that eligibility, which SBA monitors, annually. Businesses interested in applying for 8(a) certification should contact their local SBA District office to learn more about applying online or obtain a paper application to apply to the 8(a) Program Business Development Program.
CONTRACT METHODS (NOTE): Dollar thresholds change for contingency & Commercial contracts.
PROCESS FOR > $100,000 ACTIONS
|DOLLAR THRESHOLD ||TYPE||ACTION|
|>$3,000 <$25,000||Simplified Acquisition Procedures (SAP)|| Not advertised|
(sometimes posted locally)
Oral or Request for Quotation (RFQ)
Normally reserved for small
|>$25,000 <$100,000 ||SAP|| Advertised in FBO|
Oral or RFQ
Normally reserved for small business set-aside
|>$100,000||Formal / Large Contract|| Advertised in FBO|
Invitation for Bid (IFB) or Request for Proposal (RFP)
Set-aside if ≥ 2 capable 8(a)/HUBZone/SD-VOSB/SB
will submit offers @ fair market price
- Oral Presentations (if required)
- Negotiations (if required)
- Debriefing (Negotiated acquisitions, if requested)
- Subcontracting Plan Final Approval (Large business only, if required)
- Solicitation Advertised Electronically
- Solicitation Issued Electronically
- Submit Bids/Proposals Electronically
- Bids/Proposals Evaluated
- Performance & Successful Completion
Contracting Officer (CO)
A Contracting Officer (CO or KO) is a person who can bind the United Statesgovernment to a contract that is greater than the Micro-Purchase threshold . This is limited to the scope of authority delegated to the Contracting Officer by the head of the agency.
In the Department of Defense the acronym KO is used, instead of CO, not to be confused with Commanding Officer. The KO enters into, administers, or terminates contracts and makes related determinations and findings. The CO is a federal employee who is issued a Certificate of Appointment, Standard Form 1402.
Federal Acquisition Regulation (FAR)
The Federal Acquisition Regulation (FAR) is the principal set of rules in the Federal Acquisition Regulation System. This system consists of sets of regulations issued by agencies of the Federal government of the United States to govern what is called the "acquisition process"; this is the process through which the government purchases ("acquires") goods and services. That process consists of three phases: (1) need recognition and acquisition planning, (2) contract formation, and (3) contract administration. The FAR System regulates the activities of government personnel in carrying out that process. It does not regulate the purchasing activities of private sector firms, except to the extent that parts of it are incorporated into government solicitations and contracts by reference. The single most heavily regulated aspect of acquisition is contract pricing, which is addressed throughout the FAR, but especially in Subpart 15.4, Parts 30 and 31, and Subparts 42.7, 42.8, and 42.17. A large part of the FAR, Subchapter D, describes various socio-economic programs, such as the various small business programs, purchases from foreign sources, and laws written to protect laborers and professionals working under government contracts.
Federal Business Opportunities (FedBizOpps / FBO)
Federal Business Opportunities, or FedBizOpps for short, is the government wide single-point-of-entry on the internet for all Federal government contracting opportunities. It lists all major Federal government solicitations, contract awards, subcontracting opportunities, surplus property sales and foreign business opportunities. FedBizOpps is where HUD and the rest of the Federal government must announce their proposed contracts expected to exceed $25,000. Persons who want to do business with the government should visit the FedBizOpps site often. It is a very good way to keep fully informed of Federal contracting opportunities.
You can access FedBizOpps free of charge online.
General Services Administration (GSA)The General Services Administration (GSA) is an independent agency of the United States government, established in 1949 to help manage and support the basic functioning of federal agencies. The GSA supplies products and communications for U.S. government offices, provides transportation and office space to federal employees, and develops government-wide cost-minimizing policies, and other management tasks. GSA assists with procurement work for other government agencies. As part of this effort, it maintains the large GSA Schedule, which other agencies can use to buy goods and services. The GSA Schedule can be thought of as a collection of pre-negotiated contracts. Procurement managers from government agencies can view these agreements and make purchases from the GSA Schedule knowing that all legal obligations have been taken care of by GSA.The GSA Schedule is awarded as a prime contract entered into by the federal government and a vendor that has submitted an acceptable proposal. At the core of the GSA Schedule contract lie two key concepts: 1) Basis of Award customer or group of customers and 2) Price Reduction Clause. The two concepts are applied in concert to achieve the government's pricing objectives for the GSA Schedule program. Namely, the government wants to ensure that when the vendor experiences competitive pressures to reduce its pricing, then the government can benefit from these and be extended reduced pricing as well.
Invitation For Bid (IFB)An invitation for bid (IFB) orinvitation to bid (ITB) is an invitation to contractors or equipment suppliers, through a biddingprocess, to submit a proposal on a specific project to be realized or product or service to be furnished. IFB is generally the same thing as Request for Quote (RFQ).The IFB or RFQ is focused on pricing, and not on ideas or concepts.
If not stated otherwise, the contractor or supplier with the lowest bid is awarded the contract, provided that they meet the minimum criteria for the bid.
The invitation for bid (IFB) term corresponds with the sealed bidding acquistion process.
Joint Venture13 CFR 121.103(h) reads:A joint venture is an association of individuals and/or concerns with interests in any degree or proportion by way of contract, express or implied, consorting to engage in and carry out no more than three specific or limited-purpose business ventures for joint profit over a two year period, for which purpose they combine their efforts, property, money, skill, or knowledge, but not on a continuing or permanent basis for conducting business generally. This means that the joint venture entity cannot submit more than three offers over a two year period, starting from the date of the submission of the first offer. A joint venture may or may not be in the form of a separate legal entity. The joint venture is viewed as a business entity in determining power to control its management. SBA may also determine that the relationship between a prime contractor and its subcontractor is a joint venture, and that affiliation between the two exists, pursuant to paragraph (h)(4) of this section.What are the Advantages of Small Business Teaming through Joint Venture?• The JV or team is able to compete for larger more technically complex contracts by combining the capabilities and assets of various team members.• Relaxed affiliation rules for SB joint ventures and prime/sub teams on procurements that meet certain requirements• Relaxed performance of work requirements on procurements that meet certain requirements
Office of Small Disadvantaged Business Utilization (OSDBU)The mission of the Federal Office of Small and Disadvantaged Business Utilization (OSDBU) Directors Interagency Council (OSDBU Council) is to exchange information on methods, initiatives, and best practices among the group that supports the implementation and execution of the Federal small business contracting programs. The members may use the information within their respective agencies to more effectively utilize small businesses in prime contracts and subcontracts to the maximum extent practicable. The Small Business Act as amended by Public Law 95-507 established the Office of Small and Disadvantaged Business (OSDBU). The Director of the OSDBU is the primary advocate within each Federal Executive Agency responsible for promoting the maximum practicable use of all designated small business categories within the Federal Acquisition process. The OSDBU is tasked with ensuring that each Federal agency and their large prime vendors comply with federal laws, regulations, and policies to include small business concerns as sources for goods and services as prime contractors and subcontractors. Some Federal Departments and entities may have offices in their organizations that are not designated as OSDBU but have similar responsibilities. The goal of the OSBDU and each of these offices is to advocate for and manage the small business utilization programs for their organization.
Minoity OwnedA Minority Business Enterprise (MBE) is an Americanterm which is defined as a business which is at least 51% owned, operated and controlled on a daily basis by one or more (in combination) American citizens of the following ethnic minority classifications:
- African American
- Asian American (includes West Asian Americans (India, etc.) and East Asian Americans (Japan, Korea, etc.))
- Hispanic American - not of the Iberian peninsula.
- Native American including Aleuts
MBE's can be self identified but are typically certified by a city, state or federal agency. The predominant certifier for minority businesses is the National Minority Supplier Development Council with its 35-40 regional affiliates.
Pre-SolicitationSolicitations are specific Requests for Proposals, released by award-granting federal agencies, which can result in Phase I funding agreements. Pre-Solicitation announcements, released by SBA, contain pertinent information about solicitations that will soon be released by the participating federal agencies.
Prime ContractorContractor who has a contract with the agencyresponsible for administration of a federal project or job, and has the full responsibility for its completion. A prime contractor undertakes to perform a complete contract, and may employ (and manage) one or more subcontractors to carry out specific parts of the contract.
Procurement Technical Assistance Center (PTAC)Congress created the Procurement Technical Assistance Program (PTAP) to help businesses seeking to compete successfully in federal, state and local government contracting. Funded through Cooperative agreements between DoD and state/local entities, PTACs provide a range of expert services at little or no charge.
Request For Proposal (RFP)A request for proposal (RFP) is issued at an early stage in a procurement process, where an invitation is presented for suppliers, often through a bidding process, to submit a proposal on a specific commodity or service. The RFP process brings structure to the procurement decision and is meant to allow the risks and benefits to be identified clearly upfront.
The RFP may dictate to varying degrees the exact structure and format of the supplier's response. Effective RFPs typically reflect the strategy and short/long-term business objectives, providing detailed insight upon which suppliers will be able to offer a matching perspective.
Similar requests include a request for quotation and a request for information.
In principle, an RFP:
An RFP typically involves more than a request for the price. Other requested information may include basic corporate information and history, financial information (can the company deliver without risk of bankruptcy), technical capability (used on major procurements of services, where the item has not previously been made or where the requirement could be met by varying technical means), product information such as stock availability and estimated completion period, and customer references that can be checked to determine a company's suitability (including educational and military background of its employees on the project --- college graduates and those with advanced college degrees add "value" from the bidder, as does an employee's military background [especially in a similar area] as the contract).
- informs suppliers that an organization is looking to procure and encourages them to make their best effort.
- requires the company to specify what it proposes to purchase. If the requirements analysis has been prepared properly, it can be incorporated quite easily into the Request document.
- alerts suppliers that the selection process is competitive.
- allows for wide distribution and response.
- ensures that suppliers respond factually to the identified requirements.
- is generally expected to follow a structured evaluation and selection procedure, so that an organization can demonstrate impartiality - a crucial factor in public sector procurements.
Request For Quotation (RFQ)
A request for quotation (RFQ) is used when discussions with bidders are not required (mainly when the specifications of a product or service are already known) and when price is the main or only factor in selecting the successful bidder. An RFQ may also be used as a step prior to going to a full-blown RFP to determine general price ranges. In this scenario, products, services or suppliers may be selected from the RFQ results to bring in to further research in order to write a more fully fleshed out RFP.
Sealed BiddingAgencies use the Sealed Bidding method when price is the primary factor in determining contract award. This method does not allow any discussions or negotiations between the Agency and the bidders concerning either the work requirement or the price.
When using the Sealed Bidding method Agencies will issue an Invitation for Bid (IFB), stating the Agency's exact requirements. Once bids are received on a specified date, they are publicly opened and read. A contract is then awarded to the responsible bidder who submitted the lowest, responsive bid.
Service Disabled Veteran Owned Small Business (SDVOSB)In order for a business to be considered "Service-Disabled Veteran" must be at least 51% owned by an individual who can be considered by the government as a Service-Disabled Veteran. The terms "veteran" and "service-disabled veteran" are defined in 38 U.S.C 101(2) and (16). The following definitions are as stated in that code.Veteran
- The term "veteran" means a person who served in the active military, naval, or air service, and who was discharged or released under conditions other than dishonorable.
Service Disabled- with respect to disability, that such disability was incurred or aggravated in line of duty in the active military, naval, or air service. An injury or disease incurred during military service will be deemed to have been incurred in the line of duty unless the disability was caused by the veteran’s own misconduct or abuse of alcohol or drugs, or was incurred while absent without permission or while confined by military or civilian authorities for serious crimes. Note that this definition does not require the disability to be causally connected to military service.The United States Government sets aside contract benefits for companies considered as 'Service-Disabled Veteran-Owned Small Business (SDVOSB.)
Set-AsideThe Small Business Set-Aside Program (SBSA) helps assure that small businesses are awarded a fair proportion of government contracts by reserving (i.e., "setting aside") certain government purchases exclusively for participation by small business concerns.
The determination to make a small business set-aside is usually made unilaterally by the Contracting Officer. However, this determination may also be joint. In this case, it is recommended by the Small Business Administration procurement center representative (PCR) and agreed to by the Contracting Officer. The regulations specify that, to the extent practicable, unilateral determinations initiated by a Contracting Officer, rather than joint determinations, should be used as the basis for small business set-asides.
- Contracts of $0-$2,500: No set-asides available.
- Contracts of $2,500-$100,000: Under the set-aside program, every acquisition of supplies or services that has an anticipated dollar value between $2,500 and $100,000 (except for those acquisitions set aside for very small business concerns, as described below) is automatically reserved exclusively for small businesses. However, every set-aside must meet the "Rule of Two," which requires that there must be a reasonable expectation that offers will be obtained from two or more small business concerns that are competitive in terms of market prices, quality, and delivery. If only one acceptable offer is received from a responsible small business concern in response to a set-aside, the Contracting Officer is required to make an award to that firm. If no acceptable offers are received from responsible small business concerns, the set-aside will be withdrawn and the product or service, if still valid, will be solicited on an unrestricted basis.
- Contracts over $100,000: In addition, the Contracting Officer is required to set aside any contract over $100,000 for small businesses when there is a reasonable expectation that offers will be obtained from at least two responsible small business concerns offering the products of different small business concerns and that award will be made at fair market prices.
- Partial Set-Asides: A small business set-aside of a single acquisition or a class of acquisitions may be total or partial. The Contracting Officer is required to set aside a portion of an acquisition, except for construction, for exclusive small business participation when:
- A total set-aside is not appropriate.
- The government's purchase requirement is severable into two or more economic production runs or reasonable lots.
- One or more small business concerns are expected to have the technical competence and productive capacity to satisfy the set-aside portion of the requirement at a fair market price.
- The acquisition is not subject to simplified acquisition procedures.
Simplified Acquisition ProceduresSimplified Acquisition Procedures is the term the Government uses for what used to be known as Small Purchasing. These are simple, streamlined methods for making individual purchases that do not exceed $100,000.
Purchases over $3,000 but not exceeding $100,000 are reserved exclusively for small businesses. Purchases under $3,000 may be made from either large or small businesses, and usually are made with a Government credit card.
Small BusinessThe SBA, for most industries, defines a "small business" either in terms of theaverage number of employeesover the past 12 months, oraverage annual receiptsover the past three years. In addition, SBA defines a U.S. small business as a concern that:
Is organized for profit;
Has a place of business in the US; Operates primarily within the U.S. or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor; Is independently owned and operated; and Is not dominant in its field on a national basis.
The business may be a sole proprietorship, partnership, corporation, or any other legal form. In determining what constitutes a small business, the definition will vary to reflect industry differences, such as size standards.
- Small Businesses are also referred to as Small Business Concerns or Small Business Enterprises ("SBE's") in the government contracting industry
- The Small Business Administration (SBA) is responsible for determining small business size standards. The SBA maintains a size standards table categorized by industry
- Small Businesses receive special consideration from the U.S. Government for federal contracting opportunities. Some examples of special consideration include:
- Small Business Goals - each agency responsible for federal contracting procurement has small business goals they are responsible for obtaining. These small business goals vary by agency, but the consensus goal is 23% participation by small business, with 3% - 5% desired participation for various small disadvantaged businesses (women-owned, minority-owned, veteran-owned, etc.)
- Small Business Subcontracting Plan - when a federal contract action exceeds $650,000 ($1.5 million for construction), all parties submitting bid proposals must include in their bid a plan for including small business participation.
- Set-Aside Opportunities - Each acquisition of supplies or services that has an anticipated dollar value exceeding $3,000, but not over $100,000 is automatically reserved exclusively for small business concerns and shall be set aside for small business unless the contracting officer determines there is not a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in terms of market prices, quality, and delivery.
- The value of small businesses to the U.S. economy: • Represent 99.7 percent of all employer firms. • Employ about half of all private sector employees. • Pay 43 percent of total U.S. private payroll. • Have generated 65 percent of net new jobs over the past 17 years. • Create more than half of the nonfarm private GDP. • Hire 43 percent of high tech workers (scientists, engineers, computer programmers, and others). • Are 52 percent home-based and 2 percent franchises. • Made up 97.5 percent of all identified exporters and produced 31 percent of export value in FY 2008. • Produce 16.5 times more patents per employee than large patenting firms.
Small Business Administration (SBA)
The U.S. Small Business Administration (SBA) was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation. We recognize that small business is critical to our economic recovery and strength, to building America's future, and to helping the United States compete in today's global marketplace. Although SBA has grown and evolved in the years since it was established in 1953, the bottom line mission remains the same. The SBA helps Americans start, build and grow businesses. Through an extensive network of field offices and partnerships with public and private organizations, SBA delivers its services to people throughout the United States, Puerto Rico, the U. S. Virgin Islands and Guam.
What We Do
Since its founding on July 30, 1953, the U.S. Small Business Administration has delivered millions of loans, loan guarantees, contracts, counseling sessions and other forms of assistance to small businesses. SBA provides assistances primarily through its four programmatic functions:
Access to Capital (Business Financing)
SBA provides small businesses with an array of financing for small businesses from the smallest needs in microlending --- to substantial debt and equity investment capital (venture capital).
Entrepreneurial Development (Education, Information, Technical Assistance & Training)
SBA provides free individual face-to-face, and internet counseling for small businesses, and low-cost training to nascent entrepreneurs and established small businesses in over 1,800 locations throughout the United States and US territories.
Government Contracting (Federal Procurement)
In keeping with the mandate of Section 15(g) of the Small Business Act, SBA’s Office of Government Contracting sets goals with other federal departments and agencies to reach the statutory goal of 23 percent in prime contract dollars to small businesses. This office also provides small businesses with subcontracting procurement opportunities, outreach programs, and training.
Advocacy (Voice for Small Business)
Created in 1978, this Office reviews Congressional legislation and testifies on behalf of small business. It also assesses the impact of the regulatory burden on behalf of small businesses. Additionally, it conducts a vast array of research on American small businesses and the small business environment. The Chief Counsel of this office is appointed by the President of the United States.
Small Business Concern
A small business concern is organized for profit; has a place of business in the United States; makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor; is independently owned and operated; is not dominant in its field, on a national basis; and is no larger than SBA’s small business size standard for its industry. A business can find the size standard for its industry in SBA's Table of Size Standards
Small Business Liaison Officer (SBLO)The Small Business Liaison Officer's (SBLO) primary responsibility is the overall management of a large business's Small Business Program. The SBLO typically reviews, prepares and monitor the large business's Small Business requirements, ensures that contractually required small business reports are accurately prepared and are submitted on time, develops and maintains a database of small businesses, attends networking events, participates in bid and proposal efforts, provides training in all aspects of the small business program, and communicates with the small business community to foster outreach and cultivate viable sources of supply.
Small Business Size Standards
About one-fourth of industries have a size standard that is different from these levels. They vary from $0.75 million to $35.5 million for size standards based on average annual revenues and from 100 to 1,500 employees for size standards based on number of employees. Several SBA programs have either alternative or unique size standards. For instance, the Small Business Innovation Research Company (SBIC) and Certified Development Company (CDC) Programs use either the industry based size standards or net worth and net income based size standards.
Small business size standards are numerical definitions of what constitutes a small business. A business concern is small if it is at or below a size standard. If a business concern is small it is eligible for Federal government programs reserved for small business concerns. Size standards have been established for types of economic activity, or industry, as defined under the North American Industry Classification System (NAICS). The most size standards are defined based on either average number of employees over the past 12 months or average annual revenues over the past three years. The most common standards are as follows:
$0.75 million for most agricultural industries
$33.5 million for heavy construction industries
$14.0 million for specialty trade contractors
500 employees for most manufacturing and mining industries
100 employees for all wholesale trade industries
$7.0 million for most retail and service industries
Small Business Specialist (SBS)The Small Business Specialist serves as the primary liaison between private-sector small businesses seeking to do business with government agencies, which are legally required to meet small business contracting goals.The specialist advises small businesses regarding current acquisitions contracts available from the federal government.
A Small Business Specialist communicates with small businesses on the requirements, goals and applications of open acquisitions contracts, and works with them to determine their eligibility for each.
Small Business Subcontracting Plan
In accordance with Public Law 95-507, The Subcontracting Program requires prime contractors (except small businesses) with contracts over $650,000 ($1.5 million for construction) to establish subcontracting plans that provide the maximum utilization of small business concerns. Goals for subcontracting awards to small, SDB, HUBZone, Service Disabled Veteran-Owned and women-owned firms are negotiated with prime contractors. The subcontract goal achievements are monitored semiannually, with annual reports submitted through SBA to the President of the United States.
The successful offeror or bidder on contracts exceeding $650,000 must submit, before an award is made, an acceptable subcontracting plan setting percentage and dollar goals for the award of subcontracts to small and disadvantaged businesses. The OSDBU reviews all subcontract plans submitted by prime contractors to ensure compliance with the requirements of Section 211.
|Subcontracting can provide small businesses with opportunities to participate in Agency contracting opportunities by participating in contracts that they cannot win on their own. The Departments award billions of dollars annually to prime contractors. Requirements over the simplified acquisition threshold must agree in the contract that small businesses (including veteran-owned, service-disabled veteran-owned, HUBZone, disadvantaged, and women-owned businesses), will have the maximum practicable opportunity to participate in the contract consistent with it's efficient performance. Furthermore, large prime contractors receiving a Federal contract exceeding $650,000 ($1.5 million in the case of construction), and which offers subcontracting opportunities, must establish subcontracting plans with goals that provide maximum opportunities to these small businesses. OSDBU staff and the Small Business Administration, Procurement Center Representative review contracts, subcontracting plans and recommend qualified small business concerns to assist prime contractors in their subcontracting goal attainment. |
Small Disadvantaged Business (SDB)A Small Disadvantaged Business (SDB) is a small business that is at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged. SDB status makes a company eligible for bidding and contracting benefit programs involved with federal procurement. A publicly-owned business may be considered an SDB if at least 51 percent of its stock is unconditionally owned by one or more such individuals and if the public company's management and daily business is controlled by one or more such individuals.
The Small Business Administration (SBA) defines socially disadvantaged groups as those who have been, historically, subjected to "racial or ethnic prejudice or cultural bias" within the larger American culture. Identified groups include: African Americans, Asian Pacific Americans, Hispanic Americans, Native Americans and Subcontinent Asian Americans. Members of other groups may qualify if they can satisfactorily demonstrate that they meet established criteria.
Economically disadvantaged individuals are defined as those for whom impaired access to financial opportunities has hampered the ability to compete in the free enterprise system, in contrast to people in similar businesses who are not identified as socially disadvantaged.
Originally, businesses had to be certified by the SBA to qualify for SDB status. Since October 2008, companies have been able to self-certify. However, a business owner should read the definitions carefully and prepare a defense for any potential challenges to the company's SDB status.
Socioeconomic IndicatorsSocioeconomic indicators are specific attributes administered and regulated by the SBA that are used to classify your business. These socioeconomic indicators are used by the federal government in determining goals for diversity in federal contract awards. The current socioeconomic programs / options include: HUBZone Certification 8(a) Business Development Small Business Certification Women-Owned Small Business Federal Contract Program Veteran & Service-Disabled Veteran Owned Native Americans Alaskan Owned Corporations Native Hawaiian Owned Corporations
Sole SourceThe term "no-bid contract" is a popular phrase for what is officially known as a "sole source contract". A sole source contract implies that there is only one person or company that can provide the contractual services needed, and any attempt to obtain bids would only result in one person or company being available to meet the need. It is awarded usually, but not always, by a government group after soliciting and negotiating with only one firm (see 48 CFRÂ§ 2.101). These contracts can be negotiated much more quickly than a typical competitive contract. U.S. law permits the government to award sole source contracts under specified circumstances (48 CFR Ch. 1, Part 6).
Urgency is often the rationale for sole source contracts, and cost uncertainty is the rationale for cost-plus contracts
. They permit the government to get contractors working as quickly as possible. Examples of potential no-bid contracts include those awarded to Blackwater
by the United States government
for work relating to the War in Iraq
. While competitive
contracts have been awarded in very short times, such speedy procurements are not easily done and are thus relatively unusual.
Legal reasons for sole source contracts include:
- only one firm has a product that will meet the projects needs or only one firm can do the work;
- the existence of an unusual and compelling urgency;
- for purposes of industrial mobilization or expert services;
- an international agreement;
- sole source is authorized or required by law, e.g., socio-economic programs;
- national security and
- the public interest.
Use of such authorities requires written justification and approval at specified levels. See 48 CFR Ch. 1, Subpart 6.3.
SolicitationA solicitation is the document used by agencies to describe a proposed contract and to explain how to compete for it. The type of solicitation used depends on the procurement method being utilized.
If Simplified Acquisition Procedures are used, the solicitation document is called a "Request for Quotation", or RFQ for short. In some instances, price quotations will be solicited verbally (e.g., over the telephone) and no written document will be used.
If the Sealed Bidding method is used, the solicitation document is called an "Invitation for Bid", or IFB for short.
If the Negotiation method is used, the solicitation document is called a "Request for Proposal", or RFP for short.
Sources SoughtThe Sources Sought notice is a synopsis posted on FedBizOpps (fbo.gov) by a government agency that states they are seeking possible sources for a project. It is not a solicitation for work, nor is it a request for proposal. Reference the FAR, Subpart 7.3 and OMB Circular A-76.
SubcontractorAs per Federal Acquisition Regulations System, Subcontractor means any supplier, distributor, vendor, or firm that furnishes supplies or services to or for a prime contractor or another subcontractor. Subcontract means any contract as defined in subpart 2.1 entered into by a subcontractor to furnish supplies or services for performance of a prime contract or a subcontract. It includes but is not limited to purchase orders, and changes and modifications to purchase orders. 48 CFR 44.101
“Contractor team arrangement,” means an arrangement in which— (1) Two or more companies form a partnership or joint venture to act as a potential prime contractor; (2) A potential prime contractor agrees with one or more other companies to have them act as its subcontractors under a specified Government contract or acquisition program. General benefit for all concerns both large and small: The joint or team is able to compete for larger more technically complex contracts by combining the capabilities and past performance of various team members.
Woman-Owned Small Business (WOSB)As defined in the Federal Acquisition Regulation, paragraph 2.101, "Women-owned small business concern means a small business concern- (1) That is at least 51 percent owned by one or more women; or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more women; and (2) Whose management and daily business operations are controlled by one or more women."
Veteran Owned Small Business (VOSB) / Service-Disabled Veteran-Owned Small Business (SDVOSB)
A business hoping to be considered "Service-Disabled Veteran" must be at least 51% owned by an individual who can be considered by the government as a Service-Disabled Veteran. The terms "veteran" and "service-disabled veteran" are defined in 38 U.S.C 101(2) and (16). The following definitions are as stated in that code.
Veteran- The term "veteran" means a person who served in the active military, naval, or air service, and who was discharged or released under conditions other than dishonorable.
Service Disabled- with respect to disability, that such disability was incurred or aggravated in line of duty in the active military, naval, or air service. An injury or disease incurred during military service will be deemed to have been incurred in the line of duty unless the disability was caused by the veteran’s own misconduct or abuse of alcohol or drugs, or was incurred while absent without permission or while confined by military or civilian authorities for serious crimes. Note that this definition does not require the disability to be causally connected to military service.
Such disability does not require a minimum rating to be considered. A veteran with a 0 to 100% disability rating is eligible to self-represent as a Service-Disabled Veteran for Federal contracting purposes.