March  - April 2010   Volume 6, Issue 2

      

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The Small Business Administration (SBA) has proposed a rule aimed at increasing woman-owned small business (WOSB) participation in Government contracting.  Through the rule, the SBA hopes to help agencies reach the statutory goal of 5% of federal contracting dollars for WOSBs.  According to an SBA Press Release (Release Number 10-05) dated March 2, 2010, some of the components of the rule include: 

  • To be eligible, a firm must be 51 percent owned and controlled by one or more women, and primarily managed by one or more women. The women must be U.S. citizens. The firm must be “small” in its primary industry in accordance with SBA’s size standards for that industry. In order for a WOSB to be deemed “economically disadvantaged,” its owners must demonstrate economic disadvantage in accordance with the requirements set forth in the proposed rule.
  • Based upon the analysis in a study commissioned by the SBA from the Kauffman-RAND Foundation, the proposed rule identifies 83 industries (identified by “NAICS” codes) in which women-owned small businesses are under-represented or substantially under-represented.
    • The SBA has identified eligible industries based upon the combination of both the “share of contracting dollars” analysis, as well as the “share of number of contracts awarded” analysis used in the RAND study. This differs from an earlier proposed version of the rule which identified only four industries in which women-owned small businesses were under-represented. This earlier version proposed to identify eligible industries based solely on the “share of contracting dollars” analysis used in the RAND study.
  • In accordance with the statute, the proposed rule authorizes a set-aside of federal contracts for WOSBs where the anticipated contract price does not exceed $5 million in the case of manufacturing contracts and $3 million in the case of other contracts. Contracts with values in excess of these limits are not subject to set-aside under this program.
  • The proposed rule removes the requirement, set forth in a prior proposed version, that each federal agency certify that it had engaged in discrimination against women-owned small businesses in order for the program to apply to contracting by that agency.
  • The proposed rule allows women-owned small businesses to self-certify as “WOSBs” or to be certified by third-party certifiers, including government entities and private certification groups.
    • The proposed rule requires WOSBs which self-certify to submit a robust certification at the federal ORCA Web site and also to submit a core set of eligibility-related documents to an online “document repository” to be maintained by the SBA. Each agency’s contracting officers will have full access to this repository.
    • The SBA intends to engage in a significant number of program examinations to confirm eligibility of individual WOSBs.
    • In the event of a contract protest or program review, the SBA will be entitled to request substantial additional documentation from the WOSB to establish eligibility.
    • SBA intends vigorously to pursue ineligible firms which seek to take advantage of this program and in so doing to deny its benefits to the intended legitimate WOSBs.

The public will be allowed to comment on the new rule (Reference RIN 3245-AG06) up until May 3, 2010.  To view the entire rule click here.  To comment click here.

Recently the Multiple Award Schedule Advisory Panel issued its final report to the Administrator of GSA.  There was much consideration and merit to the recommendations from the expert panel of advisors.  Some of the recommendations may be easily implemented and some are more unrealistic given the current set of contracting resources available to GSA and ordering agencies.  Because the panel was original commissioned by the former Administrator Doan there are also some questions as to how important they will be to the new Administrator, Martha Johnson. 

You can review all of the panel’s recommendations by clicking here.  We will outline a few major recommendations with an eye towards what they could mean for the government and contractor.

Eliminate the Price Reduction Clause for services and solutions contracts.  Adopt an 803- like approach to compete orders for all agencies when using the Schedules:  Section 803 is part of the National Defense Authorization Act 2002 and requires that for orders over $100,000 the ordering agency solicit bids from all GSA contract holders.  Adoption of this practice would increase the level of competition through the use of e-Buy instead of allowing the possibility of obtaining just three bids under the current practice.  On the bright side for contractors, this would no longer tie hands for commercially-focused companies in terms of pricing.  The only caveat is that the contractor’s pricing practices would come under view again by GSA with future negotiations for GSA contract extensions.

GSA Administrator clarify (for GSA COs) the policy and methodology for obtaining “fair and reasonable price” for Schedules:  As it stands right now the negotiation process varies widely from Contracting Officer to Contracting Officer and Schedule to Schedule.  While widely used there are also no clear definitions of “Basis of Award” or “Most Favored Customer” on the part of GSA.  The Administrator’s clarification on the topic would create uniformity across contractors and result in greater transparency and equity in evaluation of GSA Schedule contracts.

GSA should develop a data collection system that would allow GSA to use the data gathered from individual agency orders in order to leverage its negotiation of Schedule prices:  If this data collection system is created, it would give GSA Contracting Officers access to view all spot discounts given to ordering agencies by contractors on GSA Schedule buys.  The result will likely be that contractors are required to lower GSA Schedule prices permanently due to the discounts offered off GSA Schedule prices.   While this makes good sense for GSA in terms of negotiating lower pricing it may also hurt ordering agencies if it ultimately causes contractors to eliminate the discounts offered when using the GSA Schedule.  It also brings into question the level of reporting necessary on the part of the ordering agencies as well as the staff required to maintain the database at GSA.

Instruct GSA COs to use both vertical pricing (based on basis of award customer) and horizontal pricing (based on a market price comparison) in determining price reasonableness:  Currently GSA Schedule pricing is negotiated only on a vertical pricing (commercial practices) basis.  Each contractor is compared to its own pricing practices to determine fair and reasonableness.  While also doing a competitive analysis may benefit GSA in terms of lower pricing, the inclusion of this analysis would require much more time on the part of an already overworked  and overloaded staff at GSA.  There also remains the fact that comparing prices for services is also extremely difficult when attempting to create an apple/apple comparison for different labor categories.

It will be exciting to see if and how GSA decides to implement any of these recommendations; so as always, it is in the best interest of the contractor to remain attentive and knowledgeable about any changes in GSA contracting policies and how they may be affected.

      


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Newsflash

  
    Obama Memo asks Agencies to Enforce Recovery Act Reporting

The American Recovery and Reinvestment Act of 2009 (Recovery Act) required prime contractors to report a variety of information on money they receive from the Recovery Act, including such information as the total value of the project, total value of the project and the current status of the project.

It seems that the reporting requirements have not been taken seriously, or have been overlooked, by the contractor community and the agencies as reviews of the quarterly reporting indicates a lot of missing data.

 According to an article in Washington Technology, dated April 6, 2010:

 “President Obama today told agencies to intensify their pressure on contractors to file reports on how they're using money from the economic stimulus law.  For contractors who don’t file reports on their use of that money, agencies should consider ending the contract, and work to suspend or debar those companies from getting any more government contracts. If necessary, agencies should even initiate punitive actions, according to the memo.”

Agree or disagree with the enforcement tone of the memo, the law does require proper reporting and, thus, contractors have a responsibility to correctly report the information if they take the money to perform the work.  Contractors should continue to monitor this issue carefully as it emerges as a new concern within the government contracting community. 

 
     
 

Update

  
   

Inherently Governmental?  What Will it Mean?

Lately, the term “inherently governmental” is being used a lot in the federal procurement community.  According to numerous news reports, The Office of Management and Budget’s (OMB) Office of Federal Procurement Policy (OFPP) on March 31, 2010 released its draft guidance memo on the definition of what constitutes “inherently governmental” functions to “help agencies identify when other functions (or portions of functions) need to be performed by Federal employees.”

The OMB’s draft guidance wants agencies to use a definition of “inherently governmental” founded on the 1998 Federal Activities Inventory Reform Act (FAIR). The definition, which the draft guidance memo said should inserted into all existing regulations and policies, says that an activity is “inherently governmental when it is so intimately related to the public interest as to mandate performance by federal employees.” The draft also provides example of what constitutes inherently governmental activities.

Because these functions are to be performed exclusively by federal employees, according to GovernmentExec.com, “the new rule will be broader than the former definition in the Subpart 7.4 of the Federal Acquisition Regulation (FAR). It will take contractors out of the decision-making equation in the government acquisition process.”

OFPP is currently seeking public comments on the draft until May 31, 2010 and hope to adopt a final definition in late summer or early fall 2010.

  
     
   
 

May 11, 2010
 Global Services hosts The American Small Business Coalitions Washington DC Business Over Breakfast™ from 7:30am – 9:00am.  If you do business with government agencies and their contractors, you should attend Business Over Breakfast, the most productive government sector "just networking" breakfast event in DC/MD/VA.  This networking event is held the City Club Franklin Square.  It is open to the public.  Click here to register.

May 14, 2010
 Washington, DC Chapter of SCORE presents "Business Development in the Federal Sector."  This workshop will help attendees understand the Federal sector marketplace as well as the process of marketing and selling to the Federal government. This course is from 9:30 AM to 12:30 PM.  Please contact SCORE at www.scoredc.org or 202-272-0390 or register online by clicking here.

May 24, 2010
 Women Impacting Public Policy presents “Give Me 5 Training 212 – GSA Schedules Part I.”  This one hour webinar covers an in-depth guide to the GSA Schedules and the way the Government purchases from them.  This course is online from 3:00pm – 4:00pm.  WIPP members can register online by clicking here. 

May 28, 2010
 Washington, DC Chapter of SCORE presents "GSA Schedules 101.”  This half-day workshop covers important topics related to selling to the federal government on a GSA schedule.   This course is from 9:30 AM – 12:30 PM to Noon.  Please contact SCORE at www.scoredc.org or 202-272-0390 or register online by clicking here. 

June 10, 2010
 Global Services presents our GSA Schedule Post-Award Training Seminar: “Staying Compliant and Making Your GSA Contract Work.”  This course is from 9:30 AM to 1:00 PM and will be held in our offices at 1401 14th, Street, NW, Third Floor, Washington, DC, 20005. Please click here to register or call 202-234-8933. Space is extremely limited, so register today.

June 11, 2010
 Washington, DC Chapter of SCORE presents "Preparing a Winning Federal Proposal,"  This  workshop discusses responding to Requests for Proposals (RFP) and includes pre-proposal actions, government actions, capture planning, proposal planning, development and proposal reviews.  This course is from 9:30 AM to 12:30 PM.  Please contact SCORE at www.scoredc.org or 202-272-0390 or register online by clicking here. 
 

  
             


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