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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
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