The Matchmaker Team

The Matchmaker Team Mark I: Professional Small Business Program Training Series for Large Businesses and Federal Agencies

What you have before you is a “Weapon System” designed to fight lack of knowledge and misunderstanding about Small Business Programs. We hope to pass this body of information from this dedicated team, the Matchmakers HPT, to the fighters for supplier diversity all over this nation. While this training does not replace the actual regulations, the Mark I course can light the path to the wisdom needed to get the Small Business participation mission accomplished. This is the users guide to the system. Please use it wisely and often. Its application is what the American Dream is all about. Small Business owners, their families, the President and the Congress of these United States are all counting on you to get the job done. We wish you great success! Ira M. Brand, Team Leader (Retired) on behalf of the Matchmakers HPT a subcommittee of the Northeast Regional Council

Small Business TrainingMark I: Professional Small Business Program Training Series • Module 1: Public Laws and Regulations 4 • Module 2: Identifying a Small Business 22 • Module 3: How Small Business Programs Work 41 • Module 4: Preparing a Small Business Subcontracting Plan 64 • Module 5: Small Business Assessment 99 • Module 6: Small Business Metrics and Reporting 106 • Module 7: Information Resources and FAQs 129 • Module 8: Staying Current 136 • Resources 140

Module 1: Public Laws and Regulations • This Module contains information on the Public Laws and Federal Acquisition Regulations (FAR) that govern the requirements for Small Business Subcontracting Programs. These small business laws and regulations form the framework for what we do and why we do it. • The Module includes the goals for each business type and the Public Law basis for these requirements. The module also covers FAR references for incentive programs and liquidated damages provisions.

What Federal Regulations govern the formation of small business plans and the goals set for small business subcontracting? A. FAR Parts 19 and 52 B. Public Laws C. The Small Bus Law D. A and C E. A and B (check one) Answer: E FAR part 19 and 52 outline all the requirements for preparing small business plans. Public Laws are the basis for the regulations. Module 1: Public Laws and Regulations001A – FAR Regulations

What are the percentage goals setby Public Laws for? Small Business (SB) ________ Small Disadvantaged Business (SDB) ________ Woman-Owned SB (WOSB) ________ Historically Black Colleges & Universities and Minority Institutions (HBCU/MI’s) ________ HUBZone SB ________ Veteran-Owned SB (VOSB) ________ Service-Disabled VOSB (SDVOSB) ________ Alaska Native Corp. & Indian Tribes ________ And the answer is: Module 1: Public Laws and Regulations001B – FAR Regulations 23% 5% 5% Best Effort * 3% Best Effort 3% Best Effort* *Included as part of SDB Goal

About the Law Section 8(d) of the Small Business Act requires “Small, SDB, HUBZone, WOSB, VOSB, and SDVOSB have the maximum practicable opportunity to participate as subcontractors on Federal contracts, to the extent that such opportunity is consistent with efficient contract performance.” Revision of the Small Business Act of 1978 (Public Law 95-507) Redefined minority firms as Socially and Economically Disadvantaged Small Business Concerns (SDB’s). Required Federal agencies to establish small business goals and explain to Congress when goals were not met. Required small and small disadvantaged business subcontracting goals for major contracts awarded to large businesses. Reserved all Federal awards under $100,000 for small businesses. Required establishment of the Office of Small Business Programs. Directors appointed by Head of Agency. Module 1: Public Laws and Regulations001C – FAR Regulations

What is the goal for Small Disadvantaged subcontracting emphasis? A. 1% B. 2% C. 3% D. 4% E. 5% (check one) Answer: E National Defense Authorization Act (Public Law 99-661) Passed in 1987. Established Small Disadvantaged Business Program. 5% goal for minority owned businesses. Emphasized contracting with Historically Black Colleges & Universities/Minority Institutions (HBCUs/MIs). Module 1: Public Laws and Regulations001D – FAR Regulations

Public Law 103-355 introduced a 5% goal against the value of all prime contracts for Woman-Owned Small Businesses. A. True B. False (check one) Answer: A Federal Acquisition Streamlining Act of 1994 (Public Law 103-355) Section 7106 Established a government-wide goal for Woman-Owned Small Businesses (WOSBs). Not less than 5% of the total value of all prime contract/subcontract awards for each fiscal year. Note: There are no preference programs for Woman-Owned Small Businesses. Module 1: Public Laws and Regulations001E – FAR Regulations

How is a HUBZone (Historically Underutilized Business Zone) Small Business Verified? A. By SBA certification as shown in Central Contractors Registry (CCR) B. By DOC Zone Charts C. By the Census Bureau (check one) Answer: A The HUBZone Empowerment Act (Public Law 105-135) Included in the Small Business Reauthorization Act of 1997. Stimulates economic development. Creates jobs in urban and rural communities. Provides contracting preferences to small businesses that are located in a HUBZone and that hire employees who live in a HUBZone. 1% of prime contracts for HUBZone small businesses for FY1999, not less than 1.5% for FY2000, 2% for FY2001, 2.5% for FY2002, and 3% for FY2003 and each year thereafter. Module 1: Public Laws and Regulations001F – FAR Regulations

What is the Service-Disabled Veteran- Owned goal as set forth in the subcontracting provisions of Public Law 106-50? A. 1% B. 2% C. 3% D. 4% E. 5% (check one) Answer: C The Veteran's Entrepreneurship and Small Business Development Act of 1999 (Public Law 106-50) Established a goal for subcontracts awarded by prime contractors to (SDVOSB) concerns of 3%. A best effort goal for veteran-owned small businesses shall apply. Individual, Master, and Comprehensive Subcontract and Commercial Plans must incorporate these goals. Module 1: Public Laws and Regulations001G – FAR Regulations

Module 1: Public Laws and Regulations001H – SB Program Success “Incentive Clauses” FAR 52.226-1 “Utilization of Indian Organizationsand Indian Owned Economic Enterprises” • The Indian Incentive Program provides for a payment of 5% of the amount subcontracted to an Indian organization or Indian-owned economic enterprise. The clause must be included in the contract.

Module 1: Public Laws and Regulations001I – SB Program Success “Incentive Clauses” FAR 52.219-26 “Small Disadvantaged Business Participation Program” • Incentive Subcontracting for specific parameters. Monetary incentives shall be based on actual achievement as compared to proposed monetary targets for SDB sub-contracting. The incentive subcontracting program is separate and distinct from the establishment, monitoring and enforcement of SDB subcontracting goals in a sub-contracting plan. This is an incentive to encourage increased subcontracting in the North America Industry Classification System (NAICS) Major Groups and is reported at the end of the contract via the OF312 attached to the final ISR.

Module 1: Public Laws and Regulations001J – SB Program Success “Incentive Clauses” FAR 52.219-10 “Incentive Subcontracting Program” • Monetary incentive from 0-10%, which encourages the development of increased subcontracting opportunities based on actual achievement for small, Small Disadvantaged Business, Woman-Owned Small Business, HUBZone small business, Veteran-Owned Small Business, and Service-Disabled Veteran-Owned Small Business.

Module 1: Public Laws and Regulations001K – SB Program Success “Incentive Clauses” FAR 52.219-16 “Liquidated Damages - Subcontracting Plan” • Failure to comply with a subcontracting plan is considered a material breach of the contract and could result in the imposition of liquidated damages to be paid by the contractor. • Size of damages is equal to the actual amount by which the contractor missed each goal.

Module 1: Public Laws and Regulations001L – SB Program Success “Good Faith Effort” 13 CFR 125.3 “Provide the maximum practicable subcontractingopportunities for small business concerns.” “Consistent with the efficient performance of the contract.”

Module 1: Public Laws and Regulations001M – SB Program Success Example of “maximum practicable opportunity” 13 CFR 125.3 • Breaking out contract work items into economically feasible units, as appropriate. • Conducting market research to identify small business subcontractors and suppliers through all reasonable means. • Soliciting small business concerns early in the acquisition. • More>>

Module 1: Public Laws and Regulations001N – SB Program Success Example of “maximum practicable opportunity” 13 CFR 125.3 • Providing adequate and timely information about the plans, specifications, and requirements for performance of the prime contract to assist them in submitting a timely offer. • Negotiating in good faith with interested small businesses. • Assisting them to obtain bonding, lines of credit, required insurance, necessary equipment, supplies, materials, or services. • More >>

Module 1: Public Laws and Regulations001O – SB Program Success Example of “maximum practicable opportunity” 13 CFR 125.3 • Utilizing the available services of small business associations, local, state, and Federal small business assistance offices; and other organizations. • Participating in a formal mentor-protégé program with one or more small business protégés that results in developmental assistance to the protégés.

Module 1: Public Laws and Regulations001P – Small Business Goal Summary

Module 1: Public Laws and Regulations001Q – Small Business Goal Summary DoD Subcontracting Goals can Be Different

Module 2: Identifying a Small Business • This Module covers the requirements for a Small Business to qualify as a specific recognized type for identification and reporting credit under Federal contracts. • The module includes definitions of Small Disadvantaged Businesses, the minority groups and the certification requirements for HUBZone firms.

Module 2: Identifying a Small Business002A – Identifying Small BiZ How is a Small Business Identified and Certified? • Small Business Self-Certify. • Does not exceed NAICS code size standard, is not owned by a large business, self certified. Size standard exception for ANCs and Indian tribes. How is a Small Disadvantaged Business Identified and Certified? • SDBs Self-certify as of October 3, 2008. • Meets size standard (except ANCs and Indian tribes), listed in CCR, 51% owned and operated by a Socially and Economically Disadvantaged person as designated by the SBA. How is a Woman-Owned Small Business Identified and Certified? • WOSB’s Self-Certify. • Meets size standard, 51% owned and operated by one or more Women, Self Certified. How is a HUBZone Firm identified and Certified? • Certified by the SBA. • Meets size standard, located in a HUBZone, 35% of employees live in a HUBZone, owner US citizen, Certified by SBA and listed in CCR.

Module 2: Identifying a Small Business002B – Identifying Small BiZ How is a Veteran-Owned Business Identified and Certified? • Self-Certified but can be verified by Center for Veteran’s Enterprise. • Meets size standard, 51% owned and operated by one or more veterans with active duty (other than training). How is a Service-Disabled Veteran-Owned Business Identified and Certified? • Self-Certified but can be verified by Center for Veteran’s Enterprise. • Meets size standard, 51% owned and operated by one or more veterans with active duty (other than training) and a service-related disability (0-100%).

Module 2: Identifying a Small Business002C – Identifying Small BiZ Definition of a Small Business • A “for profit” concern including its affiliates that is independently owned and operated. • Not dominant in the field of operations in which it is bidding on government contracts. • Qualified as a small business under the criteria and size standards in CFR Part 121 (See 19.102).

Module 2: Identifying a Small Business002D – Identifying Small BiZ Definition of Small Disadvantaged Business • Net worth of each individual does not exceed $750,000 excluding home & firm equity. • The firm must be at least 51% unconditionally owned by one or more socially and economically disadvantaged individuals, or in the case of any publicly owned business, at least 51 percent of the voting stock is unconditionally owned by one or more socially and economically disadvantaged individuals; and whose management and daily business operations are controlled by one or more such individuals.

Module 2: Identifying a Small Business002F – Identifying Small BiZ Definition of Socially Disadvantaged Individuals • Those who have been subjected to ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.

Module 2: Identifying a Small Business002G – Identifying Small BiZ Who are the Socially Disadvantaged Individuals? • Black Americans • Hispanic Americans • Native Americans(American Indians, Native Alaskans, or Native Hawaiians)

Module 2: Identifying a Small Business002H – Identifying Small BiZ Who are the Socially Disadvantaged Individuals? • Asian Pacific Americans (persons with origins from Burma, Thailand, Malaysia, Indonesia, Singapore, Brunei, Japan, China (inc Hong Kong), Taiwan, Laos, Cambodia (Kampuchea), Vietnam, Korea, Philippines, US Trust Territory of Pacific Islands (Republic of Palau), Republic of Marshall Islands, Federated States of Micronesia, Commonwealth of the Northern Marina Islands, Guam, Samoa, Macao, Fiji, Tonga, Kiribati, Tuvalu, or Nauru). • Subcontinent Asian Americans (persons with origins from India, Pakistan, Bangladesh, Sri Lanka, Bhutan, the Maldives or Nepal).

Module 2: Identifying a Small Business002I – Identifying Small BiZ Definition of Economically Disadvantaged Individuals • Socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to the diminished capital and credit opportunities as compared to others in the same or similar line of business who are not socially disadvantaged.

Module 2: Identifying a Small Business002J – Identifying Small Biz New regulation (Sept. 17, 2007) regarding Alaskan Native Corporations and Indian Tribes * Subcontracts count towards goals for SB and SDB,regardless of the size or SBA certification status. * This new provision does not apply to Hawaiian Native owned firms.

Module 2: Identifying a Small Business002K – Identifying Small BiZ Definition of Woman-Owned Small Business (FAR 19.001) • A small business firm at least 51% owned by one or more women, or, in the case of any publicly owned business, at least 51% of the stock of which is owned by one or more women; and whose management and daily business operations are controlled by one or more women. DoD does not consider Woman-owned businesses as disadvantaged.

Module 2: Identifying a Small Business002L – Identifying Small BiZ Historically Black Colleges & Universities and Minority Institutions (HBCUs/MIs) (DFARS 252.219-7003) • Minority Institutions are those organizations having significant minority enrollment. • Designated minority groups include African Americans, Native Americans, Hispanic Americans, Asian Americans, and Pacific Islanders. • The latest list of HBCUs can be obtained at www.ed.gov/about/inits/list/whhbcu/edlite-list.html • The latest list of MIs can be obtained at • www.ed.gov/about/offices/list/ocr/edlite-minorityinst-list-tab.html

Module 2: Identifying a Small Business002M – Identifying Small BiZ Definition of HUBZone Empowerment (Public Law 104-135) • Historically Underutilized Business Zone. • An area located within one or more qualified census tracts. • Qualified non-metropolitan counties (Rural Districts). • Lands within the external boundaries of an Indian Reservation. • HUBZones have higher unemployment and lower salaries than the state average.

Module 2: Identifying a Small Business002N – Identifying Small BiZ Definition of Veteran-Owned Small Business Concern • A small business firm where, not less than 51% of which is owned by one or more veterans (as defined at 38 U.S.C. 101(2) or, in the case of any publicly owned business, not less than 51% of the stock of which is owned by one or more veterans; and the management and daily business operations of which are controlled by one or more veterans.

Module 2: Identifying a Small Business002O – Identifying Small BiZ Definition of Service-Disabled Veteran-Owned Small Business Concern • A small business firm where not less than 51% of which is owned by one or more service-disabled veterans or, in the case of any publicly owned business, not less than 51% of the stock of which is owned by one or more service-disabled veterans; and the management and daily business operations of which are controlled by one or more service-disabled veterans or, in the case of veteran with permanent and severe disability, the spouse or permanent caregiver of such veteran.

Module 2: Identifying a Small Business002P – Identifying Small BiZ (Native American) Indian Incentive Program (FAR 26.101, 52.226-1) • The Indian Incentive Program provides an incentive to prime contractors that use Indian Organizations and Indian-Owned Economic Enterprises as subcontractors. • The program allows for an incentive payment to the prime contractor equal to 5% of the amount paid to a performing Indian subcontractor, if it is authorized by the contract. • Indian organization means the governing body of any recognized Indian tribe or Indian entity.

Module 2: Identifying a Small Business002Q – Identifying Small BiZ (Native American) Indian Incentive Program (FAR 26.101, 52.226-1) • Indian-Owned economic enterprise means any Indian-owned (as determined by the Secretary of the Interior) commercial, industrial, or business activity established or organized for the purpose of profit, provided that Indian ownership shall constitute not less than 51 percent of the enterprise.

Module 2: Identifying a Small Business002R – Identifying Small BiZ Mentor-Protégé Program (DFARS 219.71) Public Law 101-510, the National Defense Authorization Act of 1991, as amended, established the Pilot Mentor-Protégé Program. • Provides incentives to prime contractors (mentors) to assist small disadvantaged businesses (SDB) firms (protégés) in enhancing their technical and business capabilities. • Hopefully lead to increased SDB participation as subcontractors in Federal and commercial contracts. • Fosters the establishment of long-term business relationships. • Firms are eligible to be mentors if they are currently performing a contract with an approved subcontracting plan and are currently eligible for the award of Federal contracts.

Module 2: Identifying a Small Business002S – Identifying Small BiZ Mentor-Protégé Program (DFARS 219.71) • Firms eligible to be a protégé: • SDB firms or • Qualifying organization that employ the severely disabled • Recent law allows HUBZones, WOSBs and VOSBs to be protégés. • Mentors and Protégés are required to execute a formal agreement that sets forth the type of developmental assistance that will be provided to the protégé. • Mentor-Protégé Programs may be for SDB credit or reimbursement.

Module 3: How Small Business Programs Work • This Module introduces the key elements of a successful Small Business Program. A rating system is provided to assist in the assessment of your current program and the suggested levels for reaching an “Outstanding” rating.

What should an effective small business subcontracting program include? A. 10 Key Elements B. 8 C. 6 D. 4 E. As many as it takes (check one) Answer: A Ten Key Elements Management Support. An active SBLO. A good Subcontracting Plan. Matchmaker SB Training. Meeting SB Goals & Objectives. A good Outreach Program. Connected to a Regional Council and a PTAC/PTAP. Active Procurement Staff Participation. Connection to CCR & Dynamic Small Business Search. Accurate and On-Time reporting. Module 3: How Small Business Programs Work003A – Small Business Program Success

1. Management Support SCORE GUIDE 1 = No management support. 3 = Management has minimal program knowledge. 5 = Management knows about the program. 7 = Management actively endorses the program. 9 = Management endorses, monitors and participates in the program. Module 3: How Small Business Programs Work003B – Small Business Program Success My company score is: 1 2 3 4 5 6 7 8 9 10 Mark Score Here: ______

2. An Active SBLO SCORE GUIDE 1 = Our company does not have an SBLO. 3 = Our SBLO has not been “Matchmaker” certified. 5 = Our SBLO is “Matchmaker” certified and is involved with at least 5 of the success elements. 7 = Same as 5 but does 7 of the success elements. 9 = Same as 5 but does all 10 elements. Module 3: How Small Business Programs Work003C – Small Business Program Success My company score is: 1 2 3 4 5 6 7 8 9 10 Mark Score Here: ______

3. A Good Subcontracting Plan SCORE GUIDE 1 = My company does not have a subcontracting plan. 3 = Our subcontracting plan is not approved by the agency buying office. 5 = Our subcontracting plan is current and approved by the agency buying office. 7 = Same as 5 and we are actively working our plan. 9 = Same as 5 and we are meeting our plan goals. 10 = Same as 5 and we are exceeding our plan goals. Module 3: How Small Business Programs Work003D – Small Business Program Success My company score is: 1 2 3 4 5 6 7 8 9 10 Mark Score Here: ______

4. Matchmaker SB Training SCORE GUIDE 1 = My company does not have a training module for Small Business. 5 = We are scheduled for “Matchmaker” training in the next 6-12 months. 10 = We are “Matchmaker” Certified. Module 3: How Small Business Programs Work003E – Small Business Program Success My company score is: 1 2 3 4 5 6 7 8 9 10 Mark Score Here: ______

5. Meeting SB Goals & Objectives SCORE GUIDE 1 = My company has no goals or objectives for small business. 3 = People are aware of subcontracting goals. 5 = Management has established company small business goals. 7 = Company goals are established and metrics reported. 9 = Same as 7, most goals are being met. 10 = Same as 7, all goals are being met or exceeded. Module 3: How Small Business Programs Work003F – Small Business Program Success My company score is: 1 2 3 4 5 6 7 8 9 10 Mark Score Here: ______

6. A Good Outreach Program SCORE GUIDE 1 = Our company does not do Outreach. 3 = Our SBLO does limited Outreach. 5 = Our Company has an active Outreach Program. 7 = Our company is active and has participated in one or more matchmaking events. 9 = Same as 7, we have connected to sources through this process. Module 3: How Small Business Programs Work003G – Small Business Program Success My company score is: 1 2 3 4 5 6 7 8 9 10 Mark Score Here: ______

7. Connected to a Regional Council and a PTAC/PTAP SCORE GUIDE 1 = What's a PTAC/PTAP? 3 = How do I connect to the SBA and a Region Council? 5 = Our company is active in our Regional Council. 7 = Same as 5, and we work with our state PTAC/PTAP. 9 = Same as 7 and we are on a “Matchmaker” Sub-Committee. SBA = Small Business Administration PTAC = Procurement Technical Assistance Center PTAP = Procurement Technical Assistance Program Module 3: How Small Business Programs Work003H – Small Business Program Success My company score is: 1 2 3 4 5 6 7 8 9 10 Mark Score Here: ______

8. Active Procurement Participation SCORE GUIDE 1 = Procurement staff is untrained. 3 = Procurement staff is aware. 5 = Procurement staff is active. 7 = Procurement staff is “Mark I Matchmaker” Certified. 9 = Same as 7, and procurement is meeting the goals. Module 3: How Small Business Programs Work003I – Small Business Program Success My company score is: 1 2 3 4 5 6 7 8 9 10 Mark Score Here: ______

The Matchmaker Team