Jennifer Schaus & Associates GOV CON WEBINAR SERIES - 2017
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Join Us for A Series of Complimentary Webinars on various US Federal Government Contracting Topics. Presenters are industry experts sharing knowledge about the competitive government contracting sector. Find all of our Govt Contracting webinars (free download) at www.JenniferSchaus.com
Contact Us @ 2 0 2 – 3 6 5 – 0 5 9 8
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
ABOUT JENNIFER SCHAUS & ASSOCIATES: -
Based in downtown Washington, DC; A la carte services for Federal Contractors;
- Proposal Writing to GSA Schedules and Contract Administration, etc.; Deep bench of industry experts; -
Educational webinars;
Networking events and seminars;
WEBSITE: http://www.JenniferSchaus.com
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
ABOUT JENNIFER SCHAUS: -
Over 20 years in federal contracting; -
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Began career with D&B; Industry speaker and author;
Board Member: GovLish; NCMA; and NMIA.
Volunteer Mentor &/or Instructor: VA PTAP; CBP / VBOC; Capitol Post; 1776; Eastern Foundry, WIT; WDCEP and the Towson University Incubator.
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
ABOUT OUR SPEAKER JON WILLIAMS
www.JenniferSchaus.com
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
ABOUT JON WILLIAMS Partner at PilieroMazza PLLC Over 15 years of experience advising contractors on a wide range of government contracting matters (202) 857 - 1000 jwilliams@pilieromazza.com
www.JenniferSchaus.com
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
ABOUT PILIEROMAZZA PLLC: PilieroMazza PLLC is a full-service law firm located in Washington, D.C. We are most well known as a government contracting firm and for more than 25 years we have helped our clients navigate the complexities of doing business with the federal government. We also provide a full range of legal services including advice on business, corporate, labor and employment, SBA procurement programs, and litigation matters. Our clients value the diverse array of legal guidance they receive from us and our responsiveness as we guide their growth and secure their success.
PHONE: (202) 857 - 1000 WEBSITE: www.pilieromazza.com
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
SBA’s 8(a) Program and Sole Source Contracts Friday, October 6, 2017
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
The Early Days of the 8(a) Program • No time limits • No restrictions on sole source awards (all self marketing) • No business mix restrictions • No restrictions on selling 8(a) companies • But, times have changed…
www.JenniferSchaus.com
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Requirements Overview • American citizenship – by birth or naturalization • Must be a small business • Majority-owned (51% or more) and controlled/managed by socially and economically disadvantaged individuals • Business must demonstrate potential for success •
Two years in business, as demonstrated by tax returns showing operating revenues in the primary industry for each of the past two years
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Or, demonstrate eligibility for waiver of the two years in business rule
• Principals must show good character
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Social Disadvantage • Member of a “Presumed Group” recognized by SBA •
i.e., Black, Hispanic, Native Americans, Asian Pacific, and Subcontinent Asian
• If not in “Presumed Group,” must provide evidence to SBA proving individual social disadvantage to include: •
At least one objective distinguishing feature (ethnic origin, gender, physical handicap, etc.)
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Personal experiences of substantial and chronic social disadvantage in the U.S.
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Negative impact on entrance or advancement in the business world because of the disadvantage
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Economic Disadvantage – at the application stage • Personal income cannot exceed $250,000, averaged over last three years • “Personal Net Worth” must be less than $250,000 •
Excludes home equity, business equity
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May exclude IRA & retirement accounts
• Total assets cannot exceed $4 million •
Includes home equity, business equity
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May exclude IRA & retirement accounts
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
SBA Annual Reviews • 8(a) participants must annually submit information to servicing SBA district office to support continued 8(a) Program participation • At a minimum, annual review submissions include: •
Certification that eligibility requirements are met
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Certification that there are no changed circumstances which could adversely affect eligibility
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Personal financial information for each disadvantaged owner
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A record of all payments, compensation, and distributions made to each owner, officer or director
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A listing of any fees paid to agents or representatives for assistance in obtaining (or seeking to obtain) a Federal contract
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Sole Source for 8(a) • Critical advantage of the 8(a) program over other set-aside programs • Great marketing tool for 8(a) firms • Why is it such a great tool? •
Agencies can issue 8(a) sole source contracts below the applicable “competitive threshold” without having to worry about the “Rule of Two”
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The “competitive thresholds” for 8(a) contracts is $7M for manufacturing and $4M for all other types of contracts
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Mechanics of 8(a) Sole Source • May be awarded to 8(a) firms and 8(a) joint ventures • Must be 8(a) eligible at the time of 8(a) sole source award •
If you are not in good standing, perhaps because you are not meeting your business mix requirements, SBA will commonly suspend your ability to obtain new sole source awards
• Procuring agency submits offering letter to SBA, and SBA issues acceptance •
According to SBA’s 8(a) Standard Operating Procedures, for sole source contracts above the simplified acquisition threshold, it must accept or reject an offering within 5 working days of receipt or the procuring agency can assume it has been accepted
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Applicable FAR Clauses • Contract should include certain FAR clauses required for 8(a) sole source awards • FAR 52.219-11 and 52.219-12 •
Note that 52.219-12 requires, among other things, that the 8(a) firm obtain approval from SBA and the procuring agency before utilizing any subcontractors in performance of the contract – this is often overlooked
• Prime contract performance requirements (i.e., the limitations on subcontracting) apply
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
More on the Competitive Thresholds • The 8(a) competitive thresholds of $7M/$4M are subject to increase every five years; next adjustment in 2020 • If the anticipated award price for a services project is $3.8M and it is accepted as an 8(a) sole source on that basis, the sole source will still be valid if the contract increases to $4.2M after negotiation •
However, the contract price cannot be more than 10% greater than the competitive threshold unless SBA determines there are not at least two 8(a) firms that would submit offers at a fair market price or the procuring agency otherwise justifies a sole source contract
• Cannot break up contract into smaller portions to fit each under the competitive threshold
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Special Rules for ANCs, Tribally-Owned Firms, and NHOs • The $7M/$4M competitive thresholds do not apply to ANCs or Tribally-owned firms • NHOs are also exempted from the competitive thresholds, but only for DoD contracts • These exemptions apply so long as SBA has not already accepted the contract into the 8(a) program as a competitive procurement • An 8(a) sole source contract to ANC/Tribe/NHO cannot exceed $22M without justification and approval • For other 8(a) firms, once they reach the lesser of $100M in combined sole source + competitive 8(a) contracts, or five times the amount of the size standard for their primary industry, the firm is no longer eligible for sole source contracts •
But this does not apply to ANCs/Tribes/NHOs
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Protests • A competitor cannot challenge 8(a) or size eligibility on an 8(a) sole source contract •
Could raise concerns with SBA and ask SBA to investigate
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SBA could question size or 8(a) eligibility
• Difficult to challenge an 8(a) sole source award through a bid protest •
Because of the broad discretion afforded to the SBA under the 8(a) statute and regulations, GAO’s review of actions under the 8(a) program generally is limited to determining whether government officials have violated regulations or engaged in bad faith
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Must have a true “smoking gun” to argue bad faith
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You could potentially challenge whether the contract value exceeds the competitive threshold
Jennifer Schaus & Associates
GOV CON WEBINAR SERIES - 2017
QUESTIONS? CONTACT OUR SPEAKER JON WILLIAMS AT (202) 857 - 1000 AND AT JWILLIAMS@PILIEROMAZZA.COM
THANK YOU FOR ATTENDING!!
WWW.JENNIFERSCHAUS.COM