Veterans First Contracting Program

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Making Use of Your
Status as a
Veteran-Owned
Small Business
Agenda
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Why does it matter if you are a VOSB/SDVOSB?
Eligibility requirements for VOSB & SDVOSB
Registration as a VOSB/SDVOSB
Are you ready to be a prime contractor?
Taking advantage of teaming relationships:
– Subcontracting to others
– Forming a joint venture
– Pursuing subcontracting opportunities
Agenda
• Why does it matter if you are a VOSB/SDVOSB?
VOSB = Veteran-owned Small Business
SDVOSB = Service-disabled VOSB
There are federal socioeconomic programs in
place to help you win contracts!
Socio-Economic Programs Can
Benefit Your Firm
• Federal Government has instituted socioeconomic programs through its acquisitions
• Firms that qualify:
– May receive contracts on a sole source basis
– May only have to compete with similar firms
– May get a price preference
– Help the Government agency meet its goals
– Help prime contractors meet their goals
What are the Basic
Socio-Economic Programs?
The programs and the federal government’s
goals are:
– Small Business—23% of total contract value, with
the following subsets:
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HUBZone Small Business—3%
Service-Disabled Veteran-Owned Small Business—3%
Small Disadvantaged Business—5%
Women-Owned Small Business—5%
The Government Only Met
One Goal in FY 2008—SDB
FY 2008 Goals vs Accomplishments
25
Percent of Total $
20
Goal
15
Actual
10
5
0
SB
HUBZ
SDVOSB
SDB
WOSB
SDVOSB Goal
• Overall, the government achieved less than ½ of the
SDVOSB goal in FY 2008
• Only 4 federal agencies met the 3% SDVOSB goal:
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Environmental Protection Agency (EPA)
General Services Administration (GSA)
Department of Labor
Department of Veterans Affairs (VA)
• There is a huge potential to help the government
meet their SDVOSB goal!
Priority Order of the
Set-Aside Programs
• On-going debate about the priority of the programs
for all agencies but VA due to recent GAO decisions
• Per GAO, socioeconomic program priorities are:
1. HUBZone Program,
2. 8(a) Program or SDVOSB Program followed by
3. Small Business
When Agencies Conduct
SDVOSB Set-Asides
• For all agencies except VA:
– After considering other programs [HUBZone and
8(a)] and deciding they do not apply or not to use
them,
– May conduct SDVOSB set-aside if it is expected
that there are at least 2 or more responsible
SDVOSBs who will submit offers and that award
can be made at a fair and reasonable price
SDVOSB Sole Source
Awards
For all agencies except VA:
Contracts may be awarded to a SDVOSB on a sole source
basis, if—
(1) Only one SDVOSB can satisfy the requirement;
(2) The price of the contract (including options) will not exceed—
(i) $5.5 million for a product; or
(ii) $3 million for a service;
(3) The SDVOSB has been determined to be a responsible contractor with
respect to performance; and
(4) Award can be made at a fair and reasonable price.
What if you are a VOSB but
not a SDVOSB?
• Department of Veterans Affairs is the only agency
with special socioeconomic programs for both:
– Veteran-owned small businesses
– Service-disabled veteran-owned small businesses
Agenda
• Eligibility requirements for VOSB & SDVOSB
– The first requirement is that the firm must be a
small business.
– Then, the firm must meet the ownership and
control requirements.
Small Business Size
Standards
• Construction –
– General building and heavy construction contractors:
no more than $33.5 million in average annual receipts
– Special trade construction: $14 million
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Manufacturing – varies, 500 to 1,500 employees
Retail Trade – varies, $7 to $29 million
Wholesale Trade – no more than 500 employees
Most Services – varies, $7 to $35.5 million
R&D – no more than 500 employees
Small Business Size
Standards (con’t)
• A firm may be a SB for one product/service and large
for others!
• Being a SB allows you to compete for SB set-asides
against other small businesses
• Must be a SB to be eligible for VOSB/SDVOSB status
• NAICS Codes:
http://www.census.gov/eos/www/naics/
• Size standards:
http://www.sba.gov/size/indexsize.html
Veteran-Owned Small
Business Concern (VOSB)
• A small business concern:
– 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.
Service-Disabled Veteran-Owned
Small Business Concern (SDVOSB)
• A small business concern:
– 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 a service-disabled veteran with permanent
and severe disability, the spouse or permanent caregiver
of such veteran.
Service-Disabled Veteran
• Service-disabled veteran means a veteran, as defined
in 38 U.S.C. 101(2), with a disability that is serviceconnected, as defined in 38 U.S.C. 101(16).
• Some businesses may be owned and operated by an
eligible surviving spouse.
• Reservists or members of the National Guard
disabled from a disease or injury incurred or
aggravated in the line of duty or while in training
status also qualify.
Disability Rating for
Federal Contracting
• This is different than a compensable disability rating!
• If your small business is at least 51% owned and controlled by one or more
veterans, investigate whether your firm qualifies as a SDVOSB.
• Bar for qualification is very low – any “service connected” disability (even
zero percent compensable) validated by VA rating letter is qualifying.
• If you had any medical condition that was addressed while you were in
service, but you do not have a VA rating letter, request a “disability rating
for federal contracting purposes” from the VA by contacting your local
Veterans Service Officer.
• Find your local Veterans Service Officer at
http://www.doa.state.nc.us/vets/locations/default.asp.
Agenda
• Registration as a VOSB/SDVOSB
– Self-certification
– Verification by the VA
Registration as a
VOSB/SVOSB
• Self-certification:
– You may self-certify as a VOSB/SDVOSB when you
register to be a federal prime contractor at
www.ccr.gov
– Accepted by all federal agencies except the
Department of Veterans Affairs when the VA uses
Veterans First Contracting Program
Veterans First Contracting
Program
• Created by Public Law 109–461, Veterans Benefits,
Health Care, & Information Technology Act of 2006
• Authorizes VA to give special preference to both
SDVOSB and VOSB
• Firms must register at www.vetbiz.gov and be
“verified”
Features of Veterans First
Contracting Program
• Makes SDVOSB and VOSB priorities #1 & 2 in satisfying VA’s
acquisition requirements
• Allows sole source contracts from $3,000 - $5,000,000
(including options) to SDVOSB and VOSB
• Requires restricted competitions via Set-Asides for SDVOSBs
and VOSBs
• Allows additional credit evaluation factors for SDVOSB or
VOSB status
• Authorizes large VA prime contractors to obtain credit for
subcontracts to SDVOSBs and VOSBs only when they
subcontract with “verified” firms
Veterans First Contracting
Program & VA Priorities
1.
2.
3.
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5.
6.
7.
8.
May make sole source award to SDVOSB if <$5 million
Required to conduct SDVOSB set-aside if don’t do #1 and it is expected
that there are at least 2 or more responsible SDVOSBs who will submit
offers and that award can be made at fair and reasonable price
May make sole source award to VOSB if <$5 million
Required to conduct VOSB set-aside if don’t do #1, #2, or #3, and it is
expected that there are at least 2 or more responsible VOSBs who will
submit offers and that award can be made at fair and reasonable price
Make award using SBA’s 8(a) program
Make award under the HUBZone program
Conduct a Small Business set-aside
Conduct a full and open competition
Agenda
• Are you ready to be a prime contractor?
Decide if this market makes sense for your firm
Should Your Firm be a
Prime Contractor?
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Not a good market for all firms
Need high-speed internet access and computer savvy
Best for firms in business at least 2 years
Need a record of good performance
Firms must be technically & financially capable
Not a good market for (most) start-ups!
Subcontracting might offer better opportunities
Agenda
• Taking advantage of teaming relationships:
– Subcontracting to others
– Forming a joint venture
– Pursuing subcontracting opportunities
Reference Material
• Limitations of Subcontracting and Joint Venture
requirements differ for different types of SB setasides
• NCMBC matrix that describes the requirements:
http://www.ncmbc.us/docs/JointVentureMatrixWord2003_000.pdf
Limitations of Subcontracting
to Other Firms
• If your firm is awarded a prime contract under any type of
small business set-aside, you must self-perform a certain
percentage of work with your own employees.
• For SDVOSB set-asides, you may use SDVOSB subs to help
you meet the requirement.
• For VOSB set-asides (conducted by the VA), you may use
VOSB subs to help you meet the requirement.
• For services, you may subcontract any or all of the rest to any
type of firm including large businesses.
Limitations of Subcontracting
to Other Firms
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Services (except construction): prime must perform at least 50% of the
cost of the contract incurred for personnel with its own employees.
• General construction: prime must perform at least 15% of the cost of the
contract with its own employees (not including the costs of materials).
• Construction by special trade contractors: prime must perform at least
25% of the cost of the contract with its own employees (not including the
cost of materials).
• Supplies or products (other than from a non-manufacturer in such supplies
or products): prime must perform at least 50% of the cost of
manufacturing the supplies or products (not including the costs of
materials).
Definitions for Limitations of
Subcontracting
• Cost of contract performance incurred for personnel:
Direct labor costs and any overhead which has only direct labor as its base,
plus the concern's General and Administrative rate multiplied by the labor
cost.
• Employees:
All individuals employed on a full-time, part-time, or other basis. This
includes employees obtained from a temporary employee agency,
professional employee organization or leasing concern. SBA will consider
the totality of the circumstances, including criteria used by the IRS for
Federal income tax purposes, in determining whether individuals are
employees of a concern. Volunteers (i.e., individuals who receive no
compensation, including no in-kind compensation, for work performed) are
not considered employees.
Dealers & Wholesalers
• For any type of SB set-aside, your firm must be
small (<500 employees), and
– For orders <$25,000, you may provide the product
of any size manufacturer
– For orders >$25,000, you must provide the
product of a SB manufacturer unless there is a
waiver
What is a Joint Venture?
• Joint venture = an association of two or more
business concerns to engage in and carry out a
single, specific business venture for joint profit, for
which purpose they combine their efforts, property,
money, skill, or knowledge, but not on a continuing
or permanent basis for conducting business
generally.
• For VA contracts, a joint venture must be in the form
of a separate legal entity.
Who Can Joint Venture under
a SDVOSB Set-Aside?
A SDVOSB and
(1) Any small business as long as
(a) for procurement with $ size standard, the procurement >1/2 size
standard or
(b) for procurement with # employees size standard, the
procurement >$10M.
For procurements of lower value than (1)(a) or (1)(b), a
SDVOSB and any small business as long as the
SDVOSB and joint venture partner considered
together as affiliated meet the SB size standard.
Who Can Joint Venture under
a VOSB Set-Aside?
A VOSB and
(1) Any small business as long as
(a) for procurement with $ size standard, the procurement >1/2 size
standard or
(b) for procurement with # employees size standard, the
procurement >$10M.
For procurements of lower value than (1)(a) or (1)(b), a
VOSB and any small business as long as the VOSB
and joint venture partner considered together as
affiliated meet the SB size standard.
What about the
Subcontracting Market?
• Federal subcontracts are commercial contracts
between two firms
• May be the best market for you, initially
• Good way to develop performance record
• Access subcontract opportunities via
www.MatchForce.org and www.ncmbc.us
Pursuing Subcontracting
Opportunities
All prime contractors
– who are other than small businesses
– with a contract over $550,000 (or $1 million for
construction)
• must negotiate a subcontracting plan with the
government with goals for awards to SB,
HUBZone, SDVOSB, SDB and WOSB firms.
• VA primes also have goals for awards to VOSB.
How to Pursue Subcontracting
Opportunities
• Market your firm to prime contractors to help
them meet their subcontracting goals.
– Create a one-page Capability Statement
– Network with prime contractors at events
– Use contract award info to identify primes
– Register at
http://www.ncmbc.us/SubcontractingInitiative.php
North Carolina Military
Business Center
• Mission: To leverage military and other federal
business opportunities for economic
development and quality of life in NC
• Goals:
– Increase military business for NC companies
– Integrate military/families into workforce
– Support defense-related recruitment
Business Development Team
• Create awareness of federal opportunities
• Identify current opportunities, notify NC firms
• Assist firms during acquisition process
• Pre-position, develop subcontract opportunities
Federal Contracts
Contracts Value
CY2005
36
$26.3 million
CY2006
162
$158.4 - $258.4 million
CY2007
163
$406.4 - $1,086.1 million
CY2008
216
$478.0 – $618.6 million
CY2009
101
$620.1 – $1,314.4 million
As of: 30 Aug 2009
MatchForce
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Matches businesses to military opportunities
Matches primes to NC sub-contractors
Matches businesses to NC job seekers
Businesses won >$1.267 billion, 2006-09 contracts
Currently on MatchForce:
14,198 NC Businesses
9,481 Contract Opportunities
As of: 30 Aug 2009
29,978 Individuals
3,886 Job Opportunities
MatchForce Business Benefits
• Easier access to government purchasing
• Source for partners, subs and suppliers
• Source for potential employees
• Support for business-to-business sales
• Support for individual-to-business sales
• Free advertising
Now: Get Engaged in the
Federal Market!
• Register at:
• www.MatchForce.org
• www.vetbiz.gov
• www.ccr.gov
• Market your firm as VOSB/SDVOSB to prime
contractors and federal agencies as appropriate
• Market your firm to VA for sole source awards
• Watch for VOSB/SDVOSB set-asides
Contact Information
• Scott Dorney, Executive Director, 910-323-4824,
dorneys@ncmbc.us
• Linn Owen, Business Development Specialist,
910-728-5122, owenl@ncmbc.us
See www.ncmbc.us and www.vetbiz.gov for resource
material!
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