SBA Procurement Update
and Surety Bonding
U.S. Small Business Administration
Syracuse District Office
September 20, 2011
SBA was created in 1953
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Syracuse DO and Elmira BO serve 34
counties of NYS
SBA provides federal programs for:
◦ Financing
◦ Business counseling
◦ Internet resources
 www.sba.gov
◦ Government contracting
Federal Self Certifications
 Self-Certifications
Small Business – NAICS Codes
Woman-owned Business (WOSB)
Economically Disadvantaged Womanowned Small Business (EDWOSB)
Minority owned
Veteran-owned Business
Service Disabled Veteran-owned Business
Formal Certifications
 Requires SBA Approval
– 8(a) - Socially and economically disadvantaged
firms enrolled in a 9-year business development
program.
– HUBZone - Small businesses located in areas
identified as historically underutilized business
zones, and with 35% of its employees living in
HUBZones.
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Must be certified by the SBA
 Application starts at www.sba.gov
 Processed in King of Prussia, PA
Must be a small business
Potential for success criteria
 Includes record of contract performance
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Must be in business for 2-years - waiver is possible.
8(a) firms are serviced by local district office and are
reviewed annually for program eligibility.
9-year term - no renewals.
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Must be 51% owned and controlled by a U.S. citizen who is
socially and economically disadvantaged
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Designated minority groups are presumed to be socially
disadvantaged, others must demonstrate by preponderance of
the evidence
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Economically disadvantaged:
◦ Net worth less than $250,000
◦ Average income less than $250,000
◦ Total assets less than $4.0 Million
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Disadvantaged owner must have highest position in firm, be
highest paid individual, and provide day-to-day full time
management
8(a) Business Development
 Sole-source and competitive set asides
benefits
• 8(a) firm self markets to agencies.
• Agencies send Offering letter to district office for
review for sole source ($4.0 million or $6.5 million mfg.)
or competitive award for 8(a) firms only.
• Sole source letter to firm’s SBA servicing office if
a specific firm is nominated.
•Open and competitive letters to office where
agency is located.
•Construction open and competitive to office where
work will be performed.
•Geographic limitation will apply.
8(a) Business Development
 Sole-source and competitive set asides
benefits (continued)
•SBA issues Acceptance letters for eligible 8(a) firm or
competitive requirement.
• Agency and 8(a) firm negotiate contract.
•SBA does not execute contract documents as long as
MOU in place – delegated authority.
•Agency send copy of executed contract/award to SBA
servicing office.
•Agencies monitor compliance with subcontracting
requirements.
•Notify SBA if violation of ostensible contractor
rule.
 Historically Underutilized Business Zones (HUBZone)
 Must be certified by SBA - no term limits
 Principal office must be in a HUBZone
www.sba.gov/hubzone has mapping system
 35% of employees must live in a HUBZone
 51% owned and controlled by a U.S. citizen
Full documentation required
HUBZone HELP desk 202-205-8885
Parity with other procurement preference programs
HUBZone areas:
 A qualified census tract (QCT) – based on an IRS
provision for low income housing in conjunction with
HUD. HUD designates the qualified census tracts.
A qualified county (QNMC) – not located in a
metropolitan statistical area in which median
household income is below a calculated rate derived
from Bureau of Labor Statistics data.
 A qualified Indian reservation – Indian Country as
defined by BIA.
 A former military base closed by the Base
Realignment and Closure Act (BRAC).
 Sole Source Awards – only 1 HUBZone firm
available, price must be fair/reasonable, price of
contract is less than $6.5 million for manufacturing or
$4.0 million for all others.
Set-aside Awards – competition restricted to
HUBZone firms if contracting officer has reasonable
expectation that 2 or more HUBZone firms will submit
offers and award at fair market price.
 Full/Open Competition – HUBZone firm has a 10%
price preference over a large business.
 Subcontracting Opportunities – no statutory
percentage goal, usually set at 3% annual goal.
Redesignated HUBZones changes effective 10/1/2011
“Grandfathered” by Congress in 2004 until 2010 census
data released.
E-mail sent Sept 1 to HUBZone firms advising of
changes
 10/1/2011 all certified QCT & QNMC firms located in a
redesignated HUBZone that has expired will be
proposed for decertification – 30 days to respond.
Firms will be able to complete HUBZone contracts in
progress
A firm must be qualified at time of initial offer and at
time of award to be eligible for HUBZone contract (FAR
clauses 51.219-3 and 52.219-4)
 Created by Veterans Benefit Act of 2003
 Applies to purchases over $3,000
 Self Certified on CCR
VA determines Service Disability
VA website (vetbiz.gov) hosts the Vender Information Pages (VIP)
database for firms eligible for VA’s Veteran-Owned Small Business
Program
 No term limits
 Competitive and sole source program benefits
•Sole source only when one SDVOSB can satisfy requirement
• Acquisitions may be set aside for competition among SDVOSB if two or
more firms can compete and award at fair market price
Subcontracting and Prime Contracting goals
Final Rule – effective 2/4/2011
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83 Four digit NAICS codes are eligible
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WOSB
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Economically Disadvantaged WOSB
◦ Woman/Women Directly Own (51% or more), Control & Manage Daily
Operations
◦ Woman/Women must be U.S. Citizens
◦ Must hold highest officer position &manage full time
◦ Plus
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Net Worth < $750,000
Income not exceeding $350,000 (3-year average)
Fair market value all assets not exceeding $6.0 million
Spousal assets must be reviewed
CERTIFICATIONS
 Self Certification
◦ Must register in CCR and ORCA certifications
◦ Upload required documents to the WOSB Repository
 Contracting officer will have 120 days to verify (FAR 19.15)
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Third Party Certifier
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SBA does not certify firms
Contracting – Federal agencies may set aside a requirement
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◦ National entity approved by SBA
for WOSB or EDWOSB for competition if less than $4.0
million ($6.0 if mfg.)
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www.sba.gov/wosb
◦ Contracting Officer’s Guide
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SBA does not issue bonds directly to a contractor.
SBA guarantees bonds issued by a surety company.
Contractor must select a participating surety
company or bonding agent (who represents a surety
company). List available at www.sba.gov.
Individual contracts of $2.0 million or less are
eligible for bond guarantee.
Surety/agent underwrites bonds and decides
whether to or not apply to SBA.
Final and bid bond applications have a processing
fee.
Two types of guarantee programs:
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Prior Approval program
◦ Submit applications by paper or electronically
through the E-Application (E-App)
◦ Available 24 hours a day and seven day a week.
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Preferred Program
◦ Paper only application
◦ Contact surety or agent directly to discuss
application requirements
Electronic bond application (E-App) process
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Prior to inputting your first application you must be
associated with a participating surety bond agency or
surety branch office. The association is done by the
agent/branch and is the “contractor initialization”.
Register for account in SBA’s General Log-in System
(GLS).
Contractors Welcome screen displays for 1st Bond
Application for set up and submission of business,
principal, bond and contract information.
Save and Submit application to agent.
Print sign and mail to agent.
Agent submits application to SBA in Denver, CO.
www.sba.gov
 8(a) BD and HUBZone applications start in
site
 WOSB and SDVOSB information
 Contracting tab has information for
Contracting Officials:
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Size
Non-manufacturer waivers
Report fraud, waste, and abuse
Protests
Small Business goaling
And more
James Quackenbush
Business Development Specialist
Syracuse District Office
315-471-9393, x252
james.quackenbush@sba.gov