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Federal 

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Millions Of Federal Contracts Are Awarded To Small Businesses.
Why Not Yours?

On the average, there are 2,000 to 5,000 new government contracting opportunities available each day in all industry categories.

 

A Small Business Set-Aside Program (SBSA) was developed to help assure that small businesses are awarded a fair portion of government contracts by reserving certain government purchases exclusively for participation by small business concerns. Any contract that has an anticipated dollar value between $2,500 and $100,000 in value is reserved for small, small disadvantaged, woman-owned, and small veteran-owned businesses. Minority-owned business have nearly doubled in the past two decades. A report from the Office of Advocacy of the U.S. Small Business Administration shows that minorities own nearly 15 percent of American businesses.The U.S. government is the world's largest buyer of products and services. Purchases by military and civilian installations amount to nearly $200 billion a year, and include everything from complex space vehicles to janitorial services and cancer research. In short, the government buys just about every category of commodity and service available. By law, federal agencies are required to establish contracting goals, such that 23% of all government buys are intended to go to small businesses. In addition, contract goals are established for women-owned businesses, small disadvantaged businesses, firms located in HUBZones and service disabled veteran-owned businesses. These government-wide goals, which are not always achieved, are 5%, 5%, 3% and 3%, respectively. They are important, however, because federal agencies have a statutory obligation to reach-out and consider small businesses for procurement opportunities. It is up to you to market and match your business products and services to the buying needs of federal agencies.

 

Selling to the Federal government is, in some ways, similar to selling to the private sector.

While federal procurement procedures may have a set of rules and regulations, many of the same marketing techniques and strategies you already employ may work here. Use your common business sense. Some tips: Get to know the agency and understand the context in which your product or service could be used.

 

 How the SBA can help:

The SBA's mission is to stimulate and foster economic development by helping new businesses get started and established firms grow. While small businesses often face considerable hurdles when trying to win federal contracts, the SBA can help overcome these barriers. The SBA works closely with other federal agencies and the nation's leading federal contractors to ensure that small businesses obtain a fair share of government contracts and subcontracts.

Identifying your business:

Clearly defining your business is important for accurate representation of your firm when submitting contract proposals. In addition, such identification can serve as a marketing strategy. Government agencies are required to establish and (strive to) meet a variety of small business procurement goals.

 

Are you a small business?
SBA defines what a small business is. Small business size standards are based on the North American Industry Classification System (NAICS). Determine if you can be classified as a small business.

 

Are you a woman-owned business?

A woman-owned business is defined as a business that is owned and controlled 51% or more by a woman or women. Currently, a woman-owned certification process is not required for federal contracts. When submitting a proposal, simply self-certify by checking the appropriate box.

 

Are you a veteran-owned business?

A veteran-owned business is defined as a business that is owned 51% by a veteran(s). There is no veteran-owned certification process to complete, simply self-certify.

Are you a service-disabled veteran-owned business?

A service-disabled business is defined as a business that is owned 51% by one or more service-disabled veterans. The Veterans Administration confirms disability.

 

Are you a small disadvantaged business? (SDB)

A small disadvantaged business is defined as a firm that is 51% or more owned, controlled and operated by a person(s) who is socially and economically disadvantaged. African Americans, Hispanic Americans, Asian Pacific Americans, Subcontinent Asian Americans, and Native Americans are presumed to qualify. Other individuals can qualify if they show by a "preponderance of the evidence" that they are disadvantaged.

 

Are you a HUBZone business?

The Small Business Administration's HUBZone Program is designed to promote economic development and employment growth in distressed areas by providing access to more federal contracting opportunities. HUBZone is defined as a "Historically Underutilized Business Zone". Certified small business firms will have the opportunity to negotiate contracts and to participate in restricted competition limited to HUBZone firms. To determine if your business is located in a HUBZone, or to apply online.

North American Industry Classification System (NAICS)

The SIC will be replaced by the six-digit North American Industry Classification System (NAICS) code. The new NAICS system was developed to reorganize business categories on a production/process-oriented basis. The purpose behind the creation of the NAICS classification system is specifically for governmental regulations and census reports.

Federal Supply Classification (FSC) - Identifies Products

The Federal government uses numeric federal supply class (FSC) codes to describe the supplies, products and commodities it purchases.

Subcontracting Opportunities:

Subcontracting or teaming with a prime contractor can be a profitable experience as well as a growth opportunity for your business. If, after assessing the capabilities and capacity of your business, you conclude that you are not ready to bid competitively for prime contracts, consider the opportunities available through subcontracting. The experience gained from performing as a subcontractor can assist you in responding to solicitations as a prime contractor. Subcontracting, however, should not be viewed only as an opportunity for less-experienced business, but also as a vehicle to enhance your qualifications to become more competitive to perform as a prime contractor.

 

On contracts over $500,000 (or $1,000,000 for construction of a public facility), large prime contractors and other-than-small subcontractors submit subcontracting plans containing specific percentage goals for small business, HUBZone small business, small disadvantaged business, women-owned small business, VOSB and service-disabled VOSB.

Subcontracting plans must contain a description of the methods and efforts used to assure that small business enterprises have an equitable opportunity to compete for subcontracts.

Subcontracting plans must be submitted by contractors for review prior to the award of any contract; failure to comply in good faith with its approved plan may subject the contractor to liquidated damages or termination for default.

 

The requirement to submit a subcontracting plan does not apply to:

 

  • Small businesses;

  • Contracts under the prescribed dollar amounts;

  • Prime contracts not offering subcontracting possibilities;

As a small business engaged in subcontracting, be sure you understand the terms and conditions of your contract with the prime contractor before agreeing to serve as a subcontractor. Ask:

1) How and when will I receive compensation from the prime contractor?

2) How much can I rely on the prime contractor for special tools, engineering advice, information on manufacturing methods, etc.?

3) How will quality control and inspection procedures be applied to my subcontract?

 

Subcontracting Opportunities: 

The Federal government purchases billions of dollars in goods and services each year that range from paper clips to complex space vehicles. To ensure that small businesses get their fair share, statutory goals have been established for federal executive agencies.

 

They are:

  • 23 percent of prime contracts for small businesses.

  • 5 percent of prime and subcontracts for small disadvantaged businesses.

  • 5 percent of prime and subcontracts for small disadvantaged businesses.

  • 3 percent of prime contracts for HUBZone small businesses.

  • 3 percent of prime and subcontracts for service-disabled veteran-owned small businesses.

 

In addition to the goals established, the Small Business Act 15(g)(1) also states that it is the policy of the United States, that each agency shall have an annual goal that represents, for that agency, the maximum practicable opportunity for small business concerns, small business concerns owned and controlled by service disabled veterans, qualified HUBZone small business concerns, small business concerns owned and operated by socially and economically disadvantaged individuals, and small business concerns owned and controlled by women, to participate in the performance of contracts let by that agency.

 

SBA's responsibility under the Small Business Act 15(g)(1) is to ensure;

 The Government-wide goal for participation of small business concerns be established at not less than the statutory levels annually and to report the agencies' achievements relative to the goals of the President.

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