OFPP Outlines Steps to Improve Small Business

VOL. 1, NO. 4
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JULY 2012
FederalAlliesNews
OFPP Outlines Steps to Improve
Small Business
IN THIS ISSUE
OFPP Outlines Steps to
Improve Small Business
Contracting ....................1
■
Federal Allies Institute’s
Summer Plans ................2
■
SBA Proposes Small
Business Set-asides
on Multiple Award
Contracts ........................2
■
Veteran advocates
call for new contractor
employment data ...........3
■
SAM implementation
delayed to late July .........4
©2012 Management Concepts, Inc. All rights reserved.
■
Agencies will be undertaking a new, prescribed
approach to improving small business contracting,
a June 6 memo from the Office of Federal Procurement Policy (OFPP) reads. The memo, released
in coordination with the Small Business Administration, is intended to increase the number of
contracts issued to small businesses through simplified acquisitions and multiple-award contracts
(MAC). The memo is the first directive from new
OFPP head Joe Jordan. Under the directive, agencies are required to take the following six steps:
(1) Issue a memo to the acquisition workforce
reminding them of the tools and authorities
available to them, set out in Section 1331 of the
Small Business Jobs Act of 2010 (P.L. 111-240).
That law, and the ensuing interim FAR rule issued on November 2, 2011 (FAR Case 2011-024),
authorizes agencies to set aside one or more parts
of a multiple-award contract, set aside task orders
placed against multiple-award contracts, and
reserve one or more multiple-award contracts for
small business concerns that are awarded using
full and open competition.
(2) Consider requiring set-asides orders under
MACs if an agency is not meeting its small business goals. “Historically, set-asides have been the
most powerful small business contracting tool,”
Jordan says. “Accordingly, an increased commitment to order set-asides is likely to be a highly
effective means to help an agency improve its
small business contracting results and meet its
small business goals.” The memo also notes that it
is up to agencies to undertake the most appropriate application of a required set-aside.
(3) Bilaterally modify existing MACs to provide for
set-asides. Jordan said that the November 2 interim
FAR rule also encourages agencies to modify
existing contracts with substantial periods of performances—at least six months—and work is left to do
to provide stipulations for small business set-asides.
(4) Improve internal controls. Contract files
should now document how the tools available
under Section 1331 were used or considered. If
small business goals aren’t being met by an agency, the memo provides, officials should sample
and review contracts to determine what market
research approaches were used, and provide an
explanation for why the agency bought the product or service on an unrestricted basis.
(5) Review SBA’s proposed rule on Section 1331.
SBA issued its own proposed rule on May 16, 2012
(77 FR 29130) “to ensure that meaningful consideration of set-asides … is given in connection with
the award of multiple award contracts and task
and delivery orders placed under them, and that
those tools are used in a consistent manner.”
(6) Ensure the workforce is trained. GSA provides free online training and has posted a set of
frequently asked questions for contracting officers
how set-asides can be applied when placing orders
under MACs. The FAQ is available at http://www.
gsa.gov/portal/content/113371 and the webinar
training is available at http://interact.gsa.gov.
To ensure that agencies take the six steps laid out
by OFPP and SBA, Jordan asks that they report
back on what action was taken toward the steps,
and if not, provide a full explanation why as well
as when the agency expects to complete the steps.
Further, Jordan suggests that small business goals
may be tied to senior managers’ performance
evaluations. “Agencies that have implemented
performance evaluations containing small business
contracting goal elements report that senior level
leadership accountability plays a critical role in
ensuring that those agencies meet or exceed their
small business contracting … goals,” Jordan says.
He asks that agencies submit a report on the actions
they have taken to ensure that senior managers are
accountable for small business contracting goals.
The agency reports are due to OMB by July 9.
The full OFPP memo is available at
www.whitehouse.gov. ■
FEDERAL ALLIES NEWS
■
JULY 2012
Federal Allies Institute’s Summer Plans
Federal Allies is a relatively new national small business and federal contractors association of humble
beginnings at Fort Myer, Virginia in 2008. With hard work and perseverance our small business network now deals with most agencies of the federal government and military.
For our business members we train, make agency introductions, collaborate, and save money on back
office operations. In collaboration with government organizations and lawmakers on Capitol Hill, we
help agencies reach small business goals, strive for regulatory flexibility, and when we need to, we convene Congressional meetings of importance to entrepreneurs.
© 2012 Management Concepts, Inc.
ISSN 2167-4590. Copying prohibited.
Federal Allies News is published by
Management Concepts Press exclusively for members of Federal Allies
Institute. Federal Allies Institute is a
national nonpartisan nonprofit dedicated to small business and federal
acquisition best practices. David T.
Boddie, Executive Director, FAI.
Publisher: Mary Cowell; Editorin-Chief: Kathleen Landerholm;
Editor: Jared Stearns; Legal Corner
Writer: Terrence M. O’Connor,
Esq. This publication is designed
to provide information on federal
acquisition and small business. It is
not intended to substitute for legal
or other professional advice.
All rights reserved. Inquiries regarding reprints should be directed
to Kathleen Landerholm at (703)
790-9595, ext. 2080; e-mail: [email protected].
No portion of this publication may
be reproduced, stored in a retrieval
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or by any means, electronic, mechanical, photocopying, xerography,
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©2012 Management Concepts, Inc. All rights reserved.
Warning: Copyright violators
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Concepts will pay a reward
of up to $1,000 for actionable
evidence of violations. Void
where prohibited by law. Contact
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Confidentiality assured.
Federal Allies is an ideal, inexpensive if not—at times—free platform for you to establish new business
ties and to learn how to succeed in the federal contracting community. Plus we have formal alliances
with U.S. Small Business Administration and other organizations.
And finally, we are an entrepreneurs’ organization that seeks more members and businesses and agency
leaders for our Board of Directors. Specifically, we seek representation in every state.
This summer, Federal Allies reinstitutes a series of networking events within Metropolitan Washington
DC to convene federal contractors of all levels of business maturity and from all parts of the country.
While many are consumed with summer reading lists and planning family vacations, a significant
portion are also focused on the dawn of Sequestration, Simpson-Bowles, and Veterans Entrepreneurial
Transition Act and the prescient balancing act of commercial and federal business.
With 40 percent of what our federal government spends actually borrowed, the U.S. is on a wrong economic course and the need to renew institutional arrangements is at hand. Federal Allies Institute was
born practically on day one of the world’s worst economic decline in any of our lifetimes, so the well-being
of this nation and the present state of the economy are not lost on our American business owner members.
We appreciate our new sponsors American Airlines, Dell and Zipcar that help make the lives of our
members more affordable, more capable and environmentally sound.
Federal Allies Institute this fall will offer seminars on Proposals 101 and Business Development. A big
topic for small business is how to weather the upcoming uncertainty in federal contracting. For those
of you that cannot make it to Washington this Summer, I invite you to tune in on August 8, 11am
to 12:30pm EDT for a webinar presented by Defense Daily featuring Federal Allies Institute’s Gary
Shumaker. For more information, see FederalAllies.org and DefenseDaily.com.
David T. Boddie
Executive Director
Federal Allies Institute
SBA Proposes Small Business Set-asides on
Multiple Award Contracts
The Small Business Administration has published a comprehensive proposal to allow federal
agencies to set aside multiple award contracts
for small businesses. The proposal is intended to
maximize awards to small businesses while providing agencies the ease and efficiency of multiple
award contract vehicles. The rule is based on sections 1311, 1313, and 1331 of the Small Business
Jobs Act of 2010 (P.L. 111-240).
to competitions for task and delivery orders
issued under certain multiple award contracts
(B-400403, Oct. 8, 2008). However, many agencies have been reluctant to pursue small business
set-asides on task and delivery orders without
specific procurement guidance.
Until recently, there has been no clear regulatory guidance on how small business programs
may be applied to multiple award contracts. In
Delex Systems, GAO held that the small business
set-aside provisions at FAR 19.502-2(b) applied
■
The proposed rule seeks to make the
following changes.
Add a definitions section to part 125 of SBA’s
regulations, moving all definitions within
the part into the one section, and adding all
definitions and terms set forth in the Jobs Act;
continued on page three
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FEDERAL ALLIES NEWS
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Revise section 125.2 to establish SBA’s responsibility during an agency’s acquisition planning,
and establish the procuring agency’s responsibilities. The decision of whether to apply a
set-aside, partial set-aside, or reserve to a small
business rests with the contracting officer.
Establish that if the “rule of two” is met, the
contracting officer must set aside the multiple
award contract. If the rule of two is not met,
the contracting officer may set aside part or
parts of the multiple award contract for small
business concerns, reserve one or more contract awards for small business concerns under
full and open multiple award procurements,
or set aside orders for small business concerns
under multiple award contracts awarded that
are full and openly competed where the rule of
two is met for a specific order.
Amend the small business size regulations to
create an exception to affiliation for teams of
small businesses for bundled contracts.
©2012 Management Concepts, Inc. All rights reserved.
The proposal establishes that there is no order of
precedence among set-asides, partial set-asides,
or reserves. “[I]f an agency could do a partial setaside or set-aside orders under a full and open
competition, there is no preference for doing the
former over the latter. Rather, all three should be
considered as part of acquisition planning and,
if more than one option is available (the circumstances fit the definition of more than one tool),
the agency should give careful consideration to
the option that works best for the agency.”
The proposal also establishes that if the contracting
officer decides not to partially set aside or reserve
a multiple award contract, or include a clause in a
full and open multiple award contract that commits the agency to set aside orders or preserve the
right to set aside orders to small businesses, the
contracting officer must explain the decision and
document it in the contract file. According to SBA,
it considered whether the documentation requirement would “create a chilling effect” against using
Jobs Act authorities (which are discretionary), but
reasoned that the requirement to document a decision to not use small businesses is not new. ■
Veteran advocates call for new
contractor employment data
Unemployment among veterans is on the rise.
And although anecdotal evidence suggests that
government contractors are hiring veterans, there
is little tangible data on the subject. At a June 5
hearing of the Senate Homeland Subcommittee
■
JULY 2012
on Contracting Oversight, panelists advocated
revamping the processes linked to veteran
employment, including revising reporting requirements and overhauling the veteran-owned
small business certification process.
Senator Clair McCaskill (D-MO) opened the
hearing by noting that unemployment among
veterans is disproportionately higher than the
national average: 12.7 percent unemployment
among veterans who have served on active duty
since September 2001, compared to 8.2 percent
unemployment nationwide. Sen. McCaskill noted
that many government contractors are known to
be major employers of veterans, but found little
data on the subject, even though companies with
government contracts valued above $100,000 are
required to report their veteran hiring and employment numbers to the Department of Labor
through the VETS-100A form. When asked to
provide data collected from government contractors for the past 10 years, the Department of
Labor could produce data for only 2009 and 2010.
Ramsey Sulayman, a legislative associate with
Iraq and Afghanistan Veterans of America,
agreed that it is difficult to access data from the
VETS-100 and -100A forms, making it nearly
impossible to understand the landscape of existing veteran contractors. And even at their best,
Sulayman told the subcommittee, the forms only
provide a snapshot of how many veterans are
employed as prime contractors or subcontractors.
Sulayman suggested revising the form to position it for greater analysis, including, for example,
adding the North American Industry Classification System categories to determine the level of
job opportunities for veterans by industry type.
Ted Daywalt, president and CEO of VetJobs,
indicated that the Vets-100 and -100A reporting
requirements actually serve as a discouragement
to hiring veterans, due to potential concerns over
the effort and cost of compliance. “From an employer’s perspective, the VETS-100 report is an
expensive paperwork exercise draining assets that
could be better utilized within the company.”
Veterans advocates also suggested easing the
certification process required for veteran-owned
and service-disabled veteran-owned small businesses that aim to work with the Department of
Veterans Affairs. Sulayman advocated a self-certification program, with enhanced documentation
requirements, to ease the process for veteranowned and service-disabled veteran-owned small
businesses.
A complete copy of the hearing testimony is
available online at http://hsgac.senate.gov. ■
3
FEDERAL ALLIES NEWS
SAM implementation
delayed to late July
Implementation of the System for Award Management (SAM) is being delayed until the end of July,
GSA officials announced. The delay is the latest
hiccup for the troubled project, which aims to
replace nine commonly-used acquisition systems
with a single interface.
Phase 1 of SAM implementation will replace the
Central Contractor Registration, the Online Representations and Certifications Application, and
the Excluded Parties List System. Originally set
to debut on May 29, the phase 1 implementation
date has now been moved to the end of July.
GSA made the decision to delay implementation
after conducting extensive testing within GSA
and in coordination with other federal agencies.
According to an announcement released by GSA
officials, the additional time is intended to ease
the transfer by giving federal agencies more time
to prepare their staff and test data transfer processes, as well as to strengthen SAM capabilities
in line with the results of the testing.
SAM implementation has seen a series of setbacks throughout its development, including
■
JULY 2012
higher-than-estimated costs, schedule delays,
and funding shortfalls. Phase 1 of SAM will
now debut about seven months behind schedule, while phases 2 and 3 are running about two
years behind schedule—and further delays may
still occur. To make matters worse, the schedule
delays will likely increase costs even further, with
GSA footing the bill for the unplanned costs of
running the legacy systems longer than intended.
After evaluating the project, GAO auditors
released a March 15, 2012 report recommending
that GSA reassess its business case to determine
the most cost-effective strategy going forward
(GAO-12-429). GSA’s options, GAO said, are
to (1) kill program development altogether and
continue with the remaining legacy systems; (2)
maintain the current acquisition strategy; or (3)
design a new acquisition strategy.
In a written response to GAO’s findings, GSA
officials agreed with the recommendation to
reevaluate the business plan. The agency has
appointed an integrated project team to reassess
and develop a broad plan covering both SAM
and the IAE program as a whole.
More information on the System for Award Management is available online at www.sam.gov. ■
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©2012 Management Concepts, Inc. All rights reserved.
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