Federal Government Contracting as a

Small and Small Disadvantaged

Business

Joe Smith

Matthew Haws

Leslie Harrelson

July 19, 2012

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Today’s Discussion

1. What are Small and Small Disadvantaged

Businesses?

2. What are the benefits to Small Businesses?

3. Small Business Support Policies

4. Small Disadvantaged Business Programs

• 8(a) Business Development Program

• Women-Owned Small Business (WOSB) Program

• Service-Disabled Veteran Owned Business Program

• HUBZone Empowerment Contracting Program

5. Local Success Story & Resources

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What is a Small Business?

Just what it sounds like!

Okay, there is a legal definition:

U.S. Based for-profit entity

Independently owned and operated

Not dominant in its field

Meets applicable size standards

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What is a Small Disadvantaged

Business? In addition to the basic policies for supporting small

business, programs exist to support disadvantaged

small businesses:

• SBA’s 8(a) Business Development Program—socially and

economically disadvantaged persons

• Women-Owned Small Business (WOSB) Program

• HUBZone Empowerment Contracting Program

• Service-Disabled Veteran Owned Business Program

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What are the benefits to Small

Businesses? The federal government wants to work with Small

Businesses:

Goal: 23% of Federal contracting dollars to small businesses

Small businesses are eligible to bid on any size contract.

Set asides: nearly all contracts between $3,000 and

$100,000 for small businesses unless it cannot get

competitive offers from two or more small businesses

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Additional Support and Benefits for Small

Disadvantaged Businesses:

Preferential access to contracting and subcontracting

opportunities, including set-asides and sole source

contracts

Monetary subcontracting incentives

Access to financial assistance

Access to training and business counseling

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Eligibility as a Small Business

The Small Business Act defines a small business

concern as one that "is independently owned and

operated and which is not dominant in its field of

operation."

“Numerical Definition”: the Act states that the definition

of a small business shall vary from industry to industry

to the extent necessary to reflect industry differences

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Size Standards

Key question is this numerical definition of small

business based on your industry.

Called the “Size Standard”

Stated in either number of employees or average annual

receipts.

SBA establishes size standards for all for-profit economic

activities as they are described under the North American

Industry Classification System (NAICS).

They apply to all Federal programs that provide a benefit to a

small business concern.

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Developing Your Strategy

•Small business programs can help you obtain

Government contracts

•SBA Contracting programs can provide support as

you seek or perform government contracts

•Subcontracting under a Government Contract as a

way to get your feet wet

Prime contractors are looking for you

Mentor/Mentee Program

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Potential Pitfalls

•Size misrepresentation

Potential liability for fraud or false statements

•Subcontracting limitations

Generally must perform 50% of the work

•Biting off more than you can chew

Poor past performance evaluations

Termination for Default

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What is a Small Disadvantaged

Business?

A small disadvantaged business (SDB) is a “small

business concern owned and controlled by socially

and economically disadvantaged individuals”

meet the Small Business Act’s definition of “small business

concern”

be at least 51% owned or controlled by socially and

economically disadvantaged individuals, and

be under the control of such individuals for its management

and daily business operations.

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8(a) Business Development Program

The 8(a) Business Development Program offers a

broad scope of assistance to firms that are at least

51% owned and controlled by socially and

economically disadvantaged individuals

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8(a) Eligibility

• To qualify, a small business must be unconditionally

owned and controlled by one more socially and

economically disadvantaged U.S. citizens

• African-Americans, Hispanic Americans, Asian

Pacific Americans, Native Americans and

Subcontinent Asian Americans are presumed to

qualify

• Individuals not in these groups can qualify if they

show by a “preponderance of the evidence” that

they are socially disadvantaged

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8(a) Eligibility Cont’d

• Economic disadvantage is shown by submitting a

narrative and documentation about one’s income,

assets and net worth

For initial 8(a) eligibility, the net worth of an individual

claiming disadvantage must be less than $250,000

For continued 8(a) eligibility after admission to the

program, net worth must be less than $750,000

• Use the Small Business Assessment Tool at

http://web.sba.gov/sbtn/sbat/index.cfm?Tool=2 to

assess your eligibility

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Applying for the 8(a) Program

1. Register in the Central Contractor Registration

(CCR) database, www.ccr.gov

2. Register in the SBA's General Log-in System

(GLS), https://eweb.sba.gov/gls/dsp_login.cfm

3. Log-in to the 8(a) Business Development Program

electronic certification system through GLS

4. Complete and submit a completed electronic

application

* See https://sba8a.symplicity.com/applicants/guide

for step-by-step guidance

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Women-Owned Small Business Program

The Women-Owned Small Business (WOSB) Program

allows federal agencies to specifically set aside

contracts solely for women-owned small businesses

(WOSBs) or economically disadvantaged women-

owned small businesses (EDWOSBs)

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WOSB Eligibility

To qualify as a WOSB, a business must be:

• A small business that is at least 51% percent

unconditionally and directly owned and controlled

by one or more women who are United States

citizens

• There is no minimum amount of time that a

company must be in business to be eligible

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WOSB Eligibility Cont’d

To qualify, a woman must:

1. Manage the day-to-day operations

2. Make long-term decisions for the business

3. Hold the highest officer position within the business

4. Work at the business full time during normal working

hours

Visit http://www.sba.gov/sites/default/files/files/WOSB

%20Compliance%20Guide_April2011.pdf for more information

on how these requirements apply to partnerships, corporations

and Limited Liability Companies (LLCs)

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EDWOSB Eligibility

To qualify as a EDWOSB, a company must be:

• A WOSB that is at least 51% owned by one or

more women who are “economically

disadvantaged”

• A woman is presumed economically disadvantaged

if she has a personal net worth of less than

$750,000, her adjusted gross yearly income

averaged over the three years before certification

is less than $350,000 and the fair market value of

all her assets is less than $6 million

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Applying for the WOSB Program

1. Read the WOSB Compliance Guide,

http://www.sba.gov/sites/default/files/files/WOSB

%20Compliance%20Guide_April2011.pdf

2. Update your status in the Central Contractor

Registration (CCR) database, www.ccr.gov, and

the Online Represenation and Certification

Application (ORCA), https://orca.bpn.gov

• The System for Award Management (SAM),

https://www.sam.gov/sam/, will replace CCR and ORCA

on July 29, 2012

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Applying for the WOSB Program Cont’d

3. Obtain a SBA General Login System (GLS)

account at https://eweb.sba.gov/gls/dsp_login.cfm

4. Go to the WOSB program repository (through

GLS) and upload all required documents

5. Visit www.fbo.gov to find government contracts set

aside for WOSBs and EDWOSBs

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Veteran-Owned Small Businesses

The Service-Disabled Veteran-Owned Small Business

Concern (SDVOSBC) Procurement Program gives

agencies with the authority to set contracts aside for

exclusive competition among service-disabled

veteran-owned small businesses, as well as the

authority to make sole source awards

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SDVOSBC Eligibility

To qualify as a SDVOSBC:

• The Service Disabled Veteran (SDV) must have a

service-connected disability that has been

determined by the Department of Veterans Affairs or

Department of Defense

• The SDV must unconditionally own 51% of the

SDVOSBC

• The SDV must control the management and daily

operations of the business

• The SDV must hold the highest officer position

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HUBZone Program

The HUBZone program is designed to help small

businesses in certain urban, rural, Base Realignment

and Closure (BRAC), Indian reservation and difficult

development areas outside the U.S. mainland gain

access to government contracting opportunities

• HUBZone areas are typically areas of low median

household income or high unemployment

• In FY 2011 DC based HUBZone firms were awarded

approximately $321 million in prime contracting,

including $78 million in HUBZone set-asides

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HUBZone Eligibility

To qualify for the HUBZone program, a business must:

• Meet SBA small business size standards

• Be at least 51% owned and controlled by U.S.

citizens

• Maintain its principal office in a HUBZone

– To see if your business is in a HUBZone, visit

http://map.sba.gov/hubzone/maps/

• Have at least 35% of its employees residing in a

HUBZone

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Is your Business in a HUBZone?

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Applying for the HUBZone Program

1. Review a sample HUBZone application form,

http://www.sba.gov/sites/default/files/files/sample_

HUB_Application.pdf

2. Register for a GLS Account,

https://eweb.sba.gov/gls/dsp_login.cfm

3. Complete and submit the online HUBZone

application, https://eweb1sp.sba.gov/hubzone/

internet/general/dsp_enter_application.cfm?null=12

368672

4. Submit Requested Documentation,

http://www.sba.gov/sites/default/files/hubzone_req

uest_for_doc.pdf

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Local Resources

• For comprehensive information on local resources

visit http://www.sba.gov/sba-direct/20008/local-

resources/

• Visit agency websites for small disadvantaged

businesses

For instance the Department of Justice’s website is

http://www.justice.gov/jmd/osdbu/

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Local Resources

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Success Story: Telesis Corporation

Payal Tak established Telesis

Corporation in September

1998 to provide information

technology services to the

federal government and

commercial industry

http://www.sbaonline.sba.gov/t

ools/resourcelibrary/successst

ories/index.html