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SBA 1 st First Wednesday Virtual Learning 2017

Learn about the Historically Underutilized Business Zone (HUBZone) Program and how to contract with HUBZone certified small businesses. Topics include set-asides, sole source awards, price evaluation preference, and limitations on subcontracting and nonmanufacturer rule.

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SBA 1 st First Wednesday Virtual Learning 2017

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  1. SBA 1st First Wednesday Virtual Learning 2017 “Contracting with HUBZone Certified Small Businesses”

  2. Hosts Dwight A. Johnson, Procurement Center Representative SBA Office of Government Contracting, Area IV, Omaha sbalearning@sba.gov (402) 221-7206 Jan Kaiser, Procurement Center Representative SBA Office of Government Contracting, Area IV, Chicago janis.kaiser@sba.gov (312) 353-7442 Deborah Crumity, Procurement Center Representative SBA Office of Government Contracting, Area IV, Rock Island Arsenal deborah.d.crumity.civ@mail.mil (309) 782-5734

  3. Welcome to “SBA Virtual Learning 2017” • Questions answered during the final 10 minutes. • Technical problems: Contact the moderator with a note or call AT&T Connect Support at 1-888-796-6118. • Page numbers stated for those working off hard copies of the program. • We cover the “SBA Quick Reference” as time allows. • For more SBA training visit the SBA Learning Center website https://www.sba.gov/tools/sba-learning-center/search/training

  4. Association of Procurement Technical Assistance Centers posts past “First Wednesday” programing • Check this link for past programs: • http://www.aptac-us.org/for-contracting-officers-sba-webinar-library/ • Contracting officer resources: “How PTACs partner with federal agencies”: • http://www.aptac-us.org/federal-partners/ • Find your nearest Procurement Technical Assistance Center at http://www.aptac-us.org

  5. FIRST WEDNESDAY VIRTUAL LEARNING SERIES – 2017 SCHEDULE9:30 to 10:30 Central Time Return to 9:30 – 10:30 am Central for remainder of the 2017 season The program schedule above is for information only and is subject to change.

  6. Looking for Your Feedback Your input is needed and we are requesting that you respond regarding the following issues… • Time Change Trial: We conducted a time change trial in DEC – JAN – FEB and held the First Wednesday training later in the day. Please provide your thoughts about the training and what worked best you and your activity. • Calling for Topics for Next Year: Please tell us what topics you would like covered in next year’s program. Please respond to the survey BY MARCH 31, 2017 to provide your opinion at:  https://www.surveymonkey.com/r/R8CP9RT • If your agency prohibits access to the Survey Monkey website send your thoughts to sbalearning@sba.gov.

  7. One Continuous Learning Point • Self-service: Fill in your name on the certificate slide and save. Download the certificate and print for your records. You submit your request for training credit IAW your agency policy, i.e. FAITAS. • Phoning in only: If you listen in groups and you want all attendees to be included on the future mailing list, send email addresses of participants in an excel document to sbalearning@sba.gov.

  8. CAUTION – Do not recommend fee for service (.com) firms for SAM registration There are firms that require fee for services to assist small businesses in a variety of ways. Registration in SAM, proposal preparations, certifications (not authorized by SBA) and assistance in getting on GSA Federal Supply Schedules and more. No government official should be promoting any individual business’ services or products as this implies endorsement of one firm over all others. The government has to remain impartial.  If you come across something that you think is great, encourage that firm to market itself, but do not market on their behalf.  The government, through the Department of Defense established the Procurement Technical Assistance Program (PTAP) which has centers throughout the country that do provide this and many other services – most of which are at no cost to a firm.

  9. Presenters • Mariana Pardo, Director HUBZone Program Washington, DC mariana.pardo@sba.gov • Alison Mueller, Attorney Advisor Office of General Counsel Washington, DC Alison.Mueller@sba.gov

  10. “Contracting with HUBZone Certified Small Businesses” Historically Underutilized Business Zone Program 13 CFR part 126 FAR subpart 19.13

  11. Overview • OVERVIEW • HUBZONE SET-ASIDES AND SOLE SOURCE AWARDS • SET ASIDE OF ORDERS • HUBZONE PRICE EVALUATION PREFERENCE IN FULL AND OPEN COMPETITION • LIMITATIONS ON SUBCONTRACTING AND NONMANUFACTURER RULE

  12. overview

  13. SBA administersthe HUBZoneProgram Status as a HUBZone small business concern (SBC) is determined by SBA, pursuant to 13 CFR part 126 • A firm must apply to SBA for HUBZone certification (13 CFR 126.300 to 126.309) • If SBA determines that a concern is a HUBZone SBC, SBA will issue a certification to that effect and will add the concern to the List of Qualified HUBZone Small Business Concerns at http://dsbs.sba.gov/dsbs/search/dsp_searchhubzone.cfm • Only firms on the List are HUBZone SBCs and eligible for HUBZone contracting preferences and awards

  14. HUBZone Contracts (13 CFR 126.600) • HUBZone contracts (including Multiple Award Contracts) include awards to qualified HUBZone SBCs through: • Sole source awards • 100% HUBZone set-aside awards and partial set-asides • Full and open competition, where the HUBZone price evaluation preference is applied • Reserves for HUBZone SBCs under Multiple Award Contracts (MAC) • Orders set-aside for HUBZone SBCs against a MAC, where the MAC was awarded in full and open competition

  15. Requirements to Bid on HUBZone Contract (13 CFR 126.601) • When a HUBZone SBC submits its initial offer on a specific HUBZone contract, it must certify to the CO that: • It is a certified HUBZone SBC that appears on SBA’s List; • There has been no material change in its circumstances that could affect its HUBZone eligibility since the date of HUBZone certification; • It is a small business under the NAICS code assigned to the procurement; and • It will“attempt to maintain”the required percentage of employees who are HUBZone residents during the performance of a HUBZone contract.

  16. Status as a HUBZone Small Business Concern • To be eligible for a HUBZone contract, a concern must be a HUBZone SBC both at the time it submits its initial offer AND at the time of contract award(13 CFR 126.601(c)) • In general, a joint venture may be considered a HUBZone SBC if both joint venturers are certified HUBZone SBCs AND each concern is small under the NAICS code assigned to the contract (13 CFR 126.616) • NOTE: On February 5, 2015, SBA published a proposed rule that would change this requirement. 80 FR 6618. Under the proposed rule, a HUBZone SBC may joint venture with a non-HUBZone SBC if each concern is small under the NAICS code assigned to the contract, and other requirements are met.

  17. How to Locate HUBZone Contractors Using the Dynamic Small Business Search (DSBS)

  18. DSBS – How HUBZone Certification is Displayed • Each firm’s DSBS profile has two fields relevant to HUBZone certification: • “HUBZone Certified? [ ] Yes [ ] No” • “HUBZone Certification Date” • "HUBZone Certified? [X] Yes [ ] No” indicates the firm is currently HUBZone certified • "HUBZone Certified? [ ] Yes [X] No” indicates the firm is NOT currently HUBZone certified • “HUBZone Certification Date” indicates the initial date of certification and does not reflect the dates of any recertification process, which are internal to SBA • NOTE: An approval letter or recertification letter is NOT valid evidence that a firm is currently HUBZone certified, since a firm may have been decertified since the notice was issued.

  19. DSBS – Example of Currently Certified HUBZone Small Business

  20. DSBS – Example Of Decertified SBC

  21. DSBS – Example of Non-HUBZone SBC

  22. Relationship Among Small Business Programs(FAR 19.203) • SBA’s small business socioeconomic programs include: • 8(a) Program • HUBZone Program • Service-Disabled Veteran-Owned (SDVO) Small Business Program • Women-Owned Small Business (WOSB) Program • There is no order of precedence among these programs • In determining which socioeconomic program to use, the contracting officer should consider, at a minimum— • Results of market research • Agency progress in fulfilling small business goals

  23. HUBZones and Parity ABOVE SAT (>$150,000) Below or AT SAT ($3,500 - $150,000) Acquisition is automatically reservedexclusively for small business CO may award as: • small business set-aside • 8(a) set-aside • HUBZone set-aside • SDVO set-aside • WOSB set-aside If “Rule of 2” is met— • CO expects to receive offers from at least 2 responsible small businesses; and • Award will be made at a fair price —Acquisition must be set-aside for small business. Before awarding as small business set-aside, CO must first consider awarding as— • 8(a) set-aside (or sole source) • HUBZone set-aside (or sole source) • SDVO set-aside (or sole source) • WOSB set-aside (or sole source) EXCEPTION: “Once 8(a), always 8(a)” rule - If a requirement has been accepted by SBA under the 8(a) Program, it must remain in the 8(a) Program unless SBA agrees to its release.

  24. HUBZONE SET-ASIDESAND SOLE SOURCE AWARDS

  25. HUBZone Set-Aside Procedures (13 CFR 126.607, FAR 19.1305) • Below SAT CO MAYaward via HUBZone set-aside • Above SAT CO SHALLconsider a HUBZone set-aside before considering a HUBZone sole source award or a small business set-aside • To award via HUBZone set-aside, CO must have a reasonable expectation that— • Offers will be received from 2+ HUBZone SBCs; and • Award will be made at a fair market price

  26. HUBZone Set-Aside – Only One Offer or No Offers(FAR 19.1305(c)) If the CO receives— • only one acceptable offerfrom a certified HUBZone SBC the CO should make an award to that concern • no acceptable offersfrom HUBZone SBCs the CO should withdraw the HUBZone set-aside and set the procurement aside for small business concerns, as appropriate (see FAR 19.203)

  27. HUBZone Sole Source Awards (13 CFR 126.612, FAR 19.1306) • CO may award a sole source contract to a HUBZone SBC (before considering a small business set-aside) if— • CO does not expect to receive offers from at least 2 HUBZone SBCs • The acquisition is greater than the SAT • Anticipated price of the contract (including options) will not exceed— • $7 M for a requirement assigned a manufacturing NAICS code; or • $4 M for all other requirements • The requirement is not currently being performed by an 8(a) participant and has not been accepted as an 8(a) requirement by SBA • The HUBZone SBC has been determined to be a responsible contractor with respect to performance • Award can be made at a fair and reasonable price • SBA has the right to appeal CO’s decision not to make a HUBZone sole source award Check for FAR inflation change

  28. SET ASIDE OF ORDERS

  29. Set-Aside of Orders A CO may— • Set-aside an order placed against a multiple-award contract for HUBZone SBCs (FAR 19.5) and no justification for this exception to fair opportunity is required (FAR 16.5) • Set-aside part(s) of a multiple-award contract for HUBZone SBCs (FAR 19.5) • Reserve one or more contract awards for HUBZone SBCs under full and open multiple-award procurements (FAR 19.5) • Set-aside orders & BPAs under the GSA Schedule (FAR 8.4)

  30. Set-Aside of Orders – FAR Part 19 Applies FAR 16.505(b)(2)(i)(F): When setting aside orders for small business concerns: • The specific small business program eligibility requirements identified in part 19 apply. FAR 8.405-5(a)(2): When setting aside orders and BPAs against the GSA Schedule: • The specific small business program eligibility requirements identified in part 19 apply. What does this mean? Examples: • HUBZone joint venture requirements apply • HUBZone limitations on subcontracting apply

  31. HUBZONE PRICE EVALUATION PREFERENCE (PEP)

  32. Price Evaluation Preference For HUBzone SBCs (13 CFR 126.613, FAR 19.1307) • The HUBZone price evaluation preference (PEP) shall be used in acquisitions conducted using full and open competition • The preference shall NOT be used— • Where price is not a selection factor (e.g.,Architect/Engineer acquisitions) • Where all fair and reasonable offers are accepted (e.g.,the award of multiple award schedule contracts) HZ PEP only applied in F&O, including on non-reserved portion or non-set-aside portion

  33. Applying the HUBZone PEP • The CO shall apply the HUBZone PEP in F&O competition, when the lowest, responsive, responsible offeror is a large business • The PEP is applied by adding a factor of 10% to— • The otherwise lowest, responsive, responsible offer from a large business (AKA the large business that is the apparent successful offeror) • Offers from HUBZone SBCs that have waived the PEP • Offers from small business concerns that are not the apparent successful offeror • NOTE: Apply PEP first, then do best value analysis NOTE: If PEP waived, then not submitting offer as HZ SBC and do not need to meet LOS or NMR

  34. Price Evaluation Preference – Examples • Before PEP applied, the large business is the lowest, responsive and responsible offeror. • After applying the 10% PEP, the large business is still the lowest, responsive and responsible offeror. • In this example, the application of the PEP does not benefit the HUBZone SBC. OFFER: HUBZone $113 Small $103 Large $100 PEP APPLIED (*10%): HUBZone $113 Small $113.3 Large $110 NOTE: If price equal  Award to the HZ SBC

  35. Price Evaluation Preference – Examples • Before PEP applied, the large business is the lowest, responsive and responsible offeror. • After applying the 10% PEP, the large business is no longer the lowest, responsive and responsible offeror. • In this example, the application of the PEP does benefit the HUBZone SBC. OFFER: HUBZone $100 Small $97 Large $95 PEP APPLIED (*10%): HUBZone $100 Small $106.7 Large $104.5

  36. Price Evaluation Preference – Examples • Before PEP applied, the small business is the lowest, responsive and responsible offeror. • Since lowest offeror is not a large business, the HUBZone PEP is not applied. OFFER: HUBZone $100 Small $95 Large $97 PEP NOT APPLIED

  37. LIMITATIONS ON SUBCONTRACTINGAND NONMANUFACTURER RULE (NMR)

  38. Limitations on Subcontracting (LOS) Final Rule published at 81 FR 34243 – Effective June 30, 2016 • NEW: A HUBZone SBC prime contractor may subcontract part of a HUBZone contract, provided the HUBZone SBC meets the following requirements: NOTE: Subcontractors that are also HUBZone SBCs are referred to as “similarly situated entities”

  39. Nonmanufacturer Rule (NMR)(13 CFR 126.601, FAR 19.1303) • NEW: A HUBZone SBC may submit an offer for supplies as a nonmanufacturer if it meets the requirements of the NMR set forth at 13 C.F.R. § 121.406(b)(1) • Final rule effective June 30 (81 FR 34243) eliminated the requirement that the manufacturer also be a HUBZone SBC • NEW: A CO may request a waiver of the NMR for a HUBZone contract • Final rule effective June 30 authorized NMR waivers for HUBZone contracts • As a result, the HUBZone program’s treatment of the NMR is now consistent with SBA’s other socioeconomic programs • For HUBZone contracts at or below $25,000, a HUBZone SBC may supply the end item of any domestic manufacturer. This means the manufacturer may be a large business, but the product acquired must be manufactured or produced in the U.S.

  40. Compliance With LOS & NMR • When do the HZ LOS and NMR apply? • HUBZone set-asides • Partial HUBZone set-asides • HUBZone reserves • Orders set-aside for HUBZone SBCs • Awards to HUBZone SBCs under F&O after HZ PEP applied • What is the compliance period? • Set aside (full or partial): Base term and each subsequent option period • HOWEVER, CO may require concern to meet the LOS or NMR for each order • Order set-aside under F&O: Term of order

  41. Questions

  42. ”SBA Quick Reference”

  43. Dynamic Small Business Search

  44. Summary of CFR Regulations SBA Size Regulations 13 CFR Part 121 HUBZoneRegulations 13 CFR 126.616 SBA Certificate of Competency 13 CFR 125.5 Service-Disabled Veteran 13 CFR 125.15(b) 8(a) and SDB Regulations 13 CFR 124.513 Small Disadvantaged Business 13 CFR 124.1002(f) WOSB Program 13 CFR 127 SBA Prime Contracting 13 CFR 125.2 SBA Subcontracting 13 CFR 125.3

  45. A. SBA Government Contracting Area Offices 1. SBA Procurement Center Representatives (PCRs) 2. SBA Commercial Market Representatives (CMRs) B. SBA District Offices 1. Business Opportunity Specialists (BOS) C. SBA Regional Offices D. SBA Headquarters Types of SBA Contacts and Offices

  46. Six SBA Government Contracting Areas at hyperlink: https://www.sba.gov/content/pcr-directory

  47. A. SBA Quick Reference - SBA Area Offices 1. Size protests (with recertification) FAR 19.302 13 CFR 121.1001 13 CFR 121.1010 2. Locating nearest SBA staffer FAR 19.4 3. Certificate of Competency FAR 19.6 13 CFR 125.5 4. COC Limitations on Subcontracting Compliance FAR 19.601 13 CFR 125.6(f) 5. Receiving copies subcontracting plans FAR 19.705-6

  48. B. SBA Quick Reference -SBA Procurement Center Representatives (PCRs) FAR 19.402  Small Business Administration procurement center representatives. (a)(1) The SBA may assign one or more procurement center representatives to any contracting activity or contract administration office to carry out SBA policies and programs… (2) If a SBA procurement center representative is not assigned to the procuring activity or contract administration office, contact the SBA Office of Government Contracting Area Office….. (b) Upon their request and subject to applicable acquisition and security regulations, contracting officers shall give SBA procurement center representatives….access to all reasonably obtainable contract….

  49. 1. SBA PCR coordination records FAR 19..501(b)    13 CFR 125.2 2. Small business set-aside appeals FAR 19.505 13 CFR 125.2(b)(7) 3. HUBZone set-aside appeals FAR 19.1305 FAR 19.1306 13 CFR 126.61 4. SDVOSB set-aside appeal FAR 19.1405 FAR 19.1406 13 CFR 125.22 5. Reporting bundling to SBA (MATOCs) FAR 19.202-1(e)(1) 13 CFR 125.2 6. SBA subcontracting plan reviews-copies FAR 19.705-5(3) 13 CFR 125.2(b)(6)(iii) FAR 19.705-6(c) 13 CFR 125.2(b)(6)(iii)(C) 7. SBA subcontracting program review FAR 19.707(4) 13 CFR 125.2(b)(6)(iii)(C) 8. Small business TFD FAR 49.402-3 (e)(4)) (Termination for default) 9. Surveillance review of agency contracting B. SBA Quick Reference SBA PCRs, cont.

  50. Small Business Coordination Forms Sent To SBA PCRs

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