The Small Business Alliance(SBA) has provided the following checklist to help you prepare to bid on private and government procurement opportunities:
Excerpts from 2011 Seattle, WA SBA Small Business Resource Guide
The Federal government has specified annual prime contracting goals for designated small businesses. The current, government-wide procurement goal stipulates that at least 23% of all federal government contracting dollars should be awarded to small businesses. In addition, targeted sub-goals are established for the following small business categories:
Small business set-asides are a powerful tool for helping small firms win federal prime contracts.
Federal contract information for total small business set-asides states that purchases “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”. This is done for contracts worth over $3,000 but under $150,000 which are automatically reserved exclusively for Small Businesses. A contract over $150,000 can also be won by a small business but those contract opportunities are no longer exclusive to small businesses.
Given certain conditions, Federal Contracting officers may set-aside solicitations to allow only Women Owned Small Business (WOSB) Programs and/or Economically Disadvantaged Women Owned Small Businesses (EDWOSB) to compete.
Government contracts can also be set-aside for small businesses in the following certification programs and socio-economic categories:
Reference: A Small Business Resource Guide
MySetAside (MSA) will guide you through the small business government contracting process and help you connect with federal and state authorities that offer opportunities that are specifically targeted for Small Businesses. MSA databases offer opportunities from well-known resources such as www.grants.gov and www.fbo.gov, in addition to other valuable resources such as the System for Award Management (SAM) and the General Services Administration (GSA).
Federal business opportunities for contractors are listed at www.fbo.gov. Federal agencies are required to use this site to communicate available procurement opportunities and their vendor requirements to the public and interested potential vendors for all contracts valued over $25,000.
The Grants.gov system houses information on over 1,000 grant programs and veterans grant applications for federal grant-making agencies, awarding a total of more than $500 billion annually.
For more information see: Government Contracting 101, Part 1 – Overview of Small Business Programs
According to SBA, small is the equivalent to 500 employees or $7.5 million in annual average receipts (with exceptions).
The SBA establishes small business size standards on an industry-by-industry basis. It uses the North American Industry Classification System (NAICS) codes to identify the various industries. NAICS classifies all economic activities into 20 sectors.
(NAICS codes are available at https://www.census.gov/eos/www/naics/).SBA has established two widely used size standards –500 employees for most manufacturing and mining industries, and $7.5 million in average annual receipts for many nonmanufacturing industries.
Five hundred employees (500) is the most prevalent size standard for many popular industries such as:
Almost all of these industries have 500 employees.
The average annual receipts for service industries and other non-manufacturing industries is $7.5 million, including;
These all must have an average of $7.5 million in gross annual receipts over the last three fiscal years.
For most industries, a company that does not exceed these size standards is considered “small.” While a business with 500 employees or $7.5 million in average annual receipts may not seem small, the purpose of setting the size standard at these levels is to allow small businesses to grow into thriving “medium” businesses before losing the benefits of their small business size status. However, the usual 500 employees/$7.5 million size standards do not apply to all industries. The SBA has set these size standards after determining the average size of the firms in each industry and the amount of competition within each industry.
The contracting officer selects the appropriate NAICS code and size standard for the supply or service he or she intends to purchase, and he or she may include this information in FAR 52.204-8, Annual Representations and Certifications.
The contracting officer’s selection can determine whether a company is allowed to participate in a small business set-aside. The contracting officer’s decision will determine whether companies with between 500 and 750 employees will be able to participate in the set-aside.
Simply put, the Non-Manufacturer Rule allows a small business to offer a product that it did not manufacture under a small business set-aside if SBA has offered a waiver.
The non-manufacturer rule is an exception to the requirement that small business contractors supplying goods to the government on set-aside contracts must perform at least 50 percent of the cost of manufacturing the items. The rule allows a small business contractor to supply products it did not manufacture so long as the products come from another small business.
Under statutory authority, the SBA may grant a waiver to this rule and allow a large business to perform more than 50 percent of the cost of performing manufacturing contracts if it finds no small business exists in a particular industry.
In order to qualify as a non-manufacturer, a small business must have less than 500 employees, be primarily engaged in the retail or wholesaletrade, normally sell the type of item being supplied, and supply the end item of a small business manufacturer, processor, or producer made in the U.S.
In 2011, the SBA updated its regulation to include an additional requirement to be a non-manufacturer:
This update to the requirements was intended to eliminate confusion at procuring agencies and prevent practices contrary to the intent of the Small Business Act. More specifically, the change seeks to eliminate situations where the SBA has waived the non-manufacturer rule and the prime contractor essentially subcontracts all services, such as warehousing or delivery, to a large business without taking possession of the products. Additionally, the non-manufacturer rule applies only to procurements that have been assigned a manufacturing or supply North American Industry Classification System (NAICS) code—NAICS Sectors 31-33.
Individual waivers are issued when there is justification that no small business manufacturer exists that can meet the requirements on a specific solicitation. This type of waiver is solicitation-specific and applies only to the primary contract.
The SBA will consider granting an individual waiver after reviewing a Contracting Officer’s small business determination, including conducting market research. This determination states that no small business manufacturer or processor can reasonably be expected to offer a product meeting the specifications, including period of performance, required of an offeror or by the solicitation. An individual waiver is applied narrowly to a select contract line item or items for a specific solicitation. The waiver must be in place prior to the receipt of offers in order for a non-manufacturer to qualify as a small business for set-aside purposes. Only Contracting Officers can request an individual waiver for a specific solicitation.
If the SBA finds that no small business manufacturers exist in a particular industry, it may issue a waiver to the non-manufacturer rule. The waiver permits a small business to provide the product of any domestic firm, regardless of size. There are two types of waivers to the non-manufacturer rule: (1) an individual contract waiver, and (2) a class of products waiver.
The SBA Office of Government Contracting provides primary oversight of non-manufacturer rule waivers. This office reviews and grants, if applicable, individual waivers and it maintains the Class Waiver List.
Important Clarifications about the Individual Waiver to the Non-Manufacturer Rule:
Source: U.S. Small Business Administration, Office of Inspector General (Report Number 14, August 2014)
A class waiver is issued only when no small business manufacturer exists within a specific industry. Once approved and added to the Class Waiver List, such a waiver is applied to all set-aside solicitations, except for HUBZone set-asides, and is used in combination with a Product Service Code number. A class waiver also applies to all items in a class of products, which is defined as a subcategory within a six-digit NAICS code.
In 2012, the paper based Annual Representations and Certifications was replaced by an automated system designed by the Integrated Acquisition Environment (IAE). The e-government initiative Online Representations and Certifications Application(ORCA) replaced the paper-based Representations and Certifications process. These Representations and Certifications (colloquially referred to as Reps and Certs) included a contractor’s information, which the government stored and made available to purchasing officers and government buyers. Completing this information at the outset eliminated the need for a contractor to submit this same information each time he or she bid on an opportunity. Before ORCA, contractors had to do just that – submit the same information each time he or she bid on an opportunity.
ORCA was folded into the government’s System for Award Management (SAM) Registration database in 2012. Contractors complete their Reps and Certs when they complete their SAM Registration. The government then validates this information.
Contractors include in their Reps and Certs information about their business (including its size, corporate structure, personnel, annual revenue, products, services, etc.), and each year must review this information and make sure that nothing has changed. If contractors do not update their Reps and Certs when information changes, the government will not award them a contract.
Contractors are also responsible for updating their Reps and Certs when the government changes a requirement. In 2016, the government changed more than 100 requirements, and contractors were required to review their Reps and Certs and make sure their information complied with these changes.
Along with Reps and Certs and an active, valid, and complete SAM Registration, contractors also must have on file with the government a Marketing Partner Identification Number (MPIN) and a DUNS number.
A private company, US Federal Contractor Registration (USFCR), maintains Reps and Certs for their clients. Each time the government makes a change, USFCR reviews client information and updates it when and as necessary. USFCR also reviews this information each year for clients when their SAM Registration is up for renewal.
Note: The US Federal Contractor Registration is a third-party registration firm who charges to complete a full-service System for Award Management (SAM) Registration. Their service includes a dedicated case manager to physically process the SAM paperwork on a client’s behalf. The Government offers free registration forms at SAM.gov, but SAM will not physically process the forms for a client. (See website for more information: https://uscontractorregistration.com/.)
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