Congress moves forward on measures for small-business contractors

budget 4By J.D. Harrison

Under the direction of former Chairman Sam Graves (R-Mo.), the House Small Business Committee over the past six years made overhauling the federal contracting process one of its top priorities, spearheading a number of initiatives intended to funnel more work – and by extension, taxpayer money – to small businesses. When Graves stepped down from the panel at the end of last year, it was unclear whether that effort would continue, or at least whether it would remain near the top of the committee’s to-do list.

Instead, it’s like he never left.

Now led by Rep. Steve Chabot (R-Ohio), the small business committee has picked up right where Graves left off. Chabot and crew recently held a series of hearings on a number of challenges facing small contractors, and last week, the panel marked up and approved a comprehensive package of changes stemming from those conversations.

“We know that when small businesses compete for federal work, it creates jobs, improves the quality of work, and saves taxpayers’ money,” Chabot said when rolling out the proposal, calling the proposed bill – dubbed the Small Contractors Improve Competition Act – “a commonsense approach to make sure that Washington is working with Main Street.”

This latest effort comes after federal agencies last year successfully hit their annual goal of delivering 23 percent of contracting dollars to small businesses for the first time since 2005. However, the money is flowing to a smaller number of businesses in the form of increasingly larger awards, suggesting that new and particularly small players may be struggling to break into the contracting arena. At the same time, there’s evidence that many of the contracts that are categorized as small-business awards actually go to large companies.

The committee has attempted to address both problems, among others, with this latest piece of legislation.

It’s unclear whether the package will be able to move through Congress on its own, but if recent history is any indication, the changes have a good shot at becoming law. Similar bundles of contract reforms approved by the small business panel have passed as part of the annual defense spending budget in each of the last few years. However, that process doesn’t take place until the end of the calendar year; thus, it could be some time before changes take effect.

For now, here’s a look at some of the proposals in the package and what they would mean for small companies that currently – or hope to in the future – work with Uncle Sam.

More emphasis on subcontracting goals

In addition to the overall 23-percent small-business contracting target, the Small Business Administration must every year set individual goals for each agency (combined, they must add up to allow the government to hit the 23 percent mark). What’s not as widely known, though, is that each department also has a small-business subcontracting goal. All told, roughly 40 percent of the money flowing through prime contractors is supposed to go to small businesses.

In handing out contracting grades, though, the SBA’s process gives little weight to an agency’s subcontracting performance. In other words, an agency can earn high marks even if most of its contracts are flowing through small businesses and into the hands of large corporations. Changes in the proposed legislation would require the SBA to factor each agency’s subcontracting performance more heavily into its annual grades. In addition, the bill would require that the small-business subcontracting goal performance be part of the evaluation process for senior agency officials for bonus purposes.

“The federal government awards billions of dollars in contracts and subcontracts to small businesses every year,” Rep. Judy Chu (D-Calif.), who initially proposed some of the subcontracting rule changes, said in a statement after the markup. “But without appropriate means of tracking awards, there is no accountability to ensure that we are succeeding at reaching our goal.”

Cut back on contract bundling

One of the most common complaints from small government contractors is that departments often “bundle” many small projects together, essentially making the contract suitable only for large companies with a large arsenal of capabilities – not highly specialized small businesses. While there are some laws already in place to deter agencies from bundling, the committee in recent hearings heard testimony indicating that the process still exists, sometimes leaving thousands of small businesses ineligible to compete for work they handled in the past.

Under the proposed legislation, each department would have to investigate their current processes and implement a plan to better adhere to anti-bundling laws. In addition, when departments currently lump smaller contracts together, they have a year to publish documents justifying the decision and showing why small firms won’t lose out. Under the new bill, every department would have to file those documents at the same time they solicit bids for the project.

Barriers removed for new joint ventures

A valuable tool for small companies looking to expand their presence in the federal procurement arena is the joint venture. Small firms can – and in fact are encouraged in many cases – to partner with a large company to bid on contract proposals. In the past, Congress approved language stripping away some of the restrictions on those sorts of joint ventures in an attempt to encourage even more small businesses to consider that path.

In some cases, though, new joint ventures struggle to win contracts because a number of federal departments have said that they only consider past performance of the partnership – that is, if this is the first time the companies have joined forces, there may be no history to consider, even if the small business has a proven track record with the federal government. If approved, the legislation would require agencies to take each party’s past performance into account.

An investigation into fraud and abuse

Despite a number of attempts to eliminate fraud and abuse in the government contracting arena, millions of dollars of contracts reserved for small businesses wind up in the hands of large corporations every year. The problem appears to stem from a combination of fraudulent activity by large companies masquerading as small businesses as well as mismanagement and reporting errors by contracting officers.

In response, Rep. Janice Hahn (D-Calif.) floated an amendment requiring the Government Accountability Office to conduct another investigation (there have been several in the past) into the problem, identify the root causes and recommend actions Congress and the administration can take to ensure that small-business contracts are actually awarded to small businesses. Her proposal was unanimously approved by the committee and folded into the legislation.

“When Fortune 500 companies are awarded small business contracts, small businesses across the country miss out on billions of dollars,” Hahn said.

SEC finalizes key JOBS Act rules for small businesses

By: J.D. Harrison

secNearly three years after the law was signed, the Securities and Exchange Commission has taken an important step toward implementing the so-called JOBS Act, making it easier for small and mid-sized businesses to raise capital through small public offerings.

Commissioners on Wednesday approved rule changes that allow companies to raise up to $50 million a year, up from a longstanding cap of $5 million, through what’s known as Regulation A offerings. Under Reg A offerings, as they’re commonly called, companies looking to raise relatively small amounts of money through a public offering are subject to a much simpler SEC registration process, putting fewer bureaucratic hoops between them and investors.

Until now, the Reg A path, which is nearly as old as the SEC itself, has been sparingly used. Congress voted to lift the cap as part of the Jumpstart Our Business Startups (JOBS) Act, which was signed into law in April 2012, largely to encourage more small and mid-sized companies to consider that option.

However, it’s another more subtle change the SEC has made to the rules – one that the agency was not specifically required to adopt – that some experts believe will make the Reg A option now much more appealing to companies in need of capital. In keeping with the initial regulations proposed about a year ago, the commissioners finalized new rules that exempt Reg A offerers from registering with state financial regulators in every state in which they’re prospective shareholders reside.

“I have never felt that the $5 million cap was that significant, because if you look at Reg D, you see that the average raise is less than $3 million,” DJ Paul, who last fall was appointed by SEC Chair Mary Jo White to join the agency’s advisory board on small and emerging companies, said in an interview. He was referencing a similar option in the SEC rulebook – known as Regulation D – which pertains to small offerings to a select group of private investors, as opposed to a public offering. “The real friction point has been this state approval requirement,” Paul said.

Under that requirement, a company that wanted to offer shares to investors in a dozen states would be subject to 13 revies of separate securities laws – one in each state and one by the SEC. State regulators have warned that those additional reviews help to thwart fraud and protect investors. However, entrepreneurs and legal experts have said there’s little evidence that the multiple-hoops process does anything except deter businesses from using Reg A.

“This regulatory process can be lengthy, cumbersome and expensive, factors that many believe have contributed to the infrequent use of Regulation A,” several attorneys from Richmond-based law firm McGuireWoods wrote in a white paper last year about the proposed rule changes. While there are typically hundreds or thousands of Reg D offerings a year, there are often only a dozen or so Reg A deals, Paul explained. Some years have passed without a single one.

Under the new rules, small businesses will now only have to go through the simplified SEC review.

“That change had to happen, or else Reg A was going to continue to be a dead-letter, never-used alternative,” said Paul, who also co-chairs an advocacy nonprofit called Crowdfund Intermediary Regulatory Advocates based in New York.

In an attempt to ease concerns about potential scams, the SEC also established two Reg A tiers. For those raising between $20 million and $50 million through a public offering, there will be additional review requirements. That’s a slight change from the proposed rules, which split the tiers at the $5 million mark. Commissioners have also agreed to require Reg A offerers to file their paperwork to the SEC for public review several weeks before they start selling to investors, giving state regulators a chance to comb through those documents if they wish to look for red flags.

Ahead of the vote, SEC Chair White said Wednesday that she believes the changes “strike an appropriate balance for the roles of federal and state law” and will make Regulation A offerings “an effective, workable path to raising capital that also provides strong investor protections.”

The finalization of the rules was the latest step in what has become an exceptionally long process to breathe life into the JOBS Act. Now on the cusp of its third birthday, only about half of the provisions in the statute – which, by providing better access to capital to new and growing businesses, was touted as a potentially powerful gust of wind in the economy’s sails – have been put in place by the SEC.

Among the most highly anticipated changes mandated by Congress but not yet implemented by the SEC are rules allowing companies to raise small amounts of money from mom-and-pop investors via what are known as online crowdfunding portals. Initially, the SEC was to give that process the green light by the end of 2013; however, the agency has been slow to move on the rule-making process. The SEC put forth proposed rules in October 2013, but it isn’t clear when they will be finalized.

While the crowdfunding rules, which are outlined in Title III of the JOBS Act, have drawn most of the JOBS Act’s spotlight, Paul explained that the Reg A changes (contained in Title IV of the legislation) will likely have a much more significant impact for certain companies.

“With Reg A, we’re talking about businesses that are going to be much further along in their life cycle than the ones that would benefit from Title III,” Paul said, noting that the online crowdfunding rules will limit entrepreneurs to raising no more than $1 million from non-accredited investors. “Obviously, a company raising $1 million is in a very different place than a company raising $40 million, or even $10 million.”

“It’s all part of a continuum,” Paul added. “While crowdfunding will be important for getting capital to genuine start-ups – ones that have three people working for them – this will help those that have 300 people working for them and are still looking to grow.”

5 Ways To Increase Your Productivity

asbdc-logo-35-years

02/25/2015

As a small business owner, you juggle a lot of daily tasks. Making a concrete plan to achieve them can help you stay productive throughout the day. In addition to starting your day right with a morning ritual, increase your productivity by setting limits on meetings, and using technology and apps to streamline your business.

Start your day right with a quick agenda overview

Do you check your email or your calendar first thing in the morning? Why not do both at the same time? Mentally prepare for the day with a quick snapshot of your daily tasks every morning by having Google Calendar email you a snapshot of your full agenda at 5 a.m. Do this by accessing the Reminders and Notifications menu, and checking the box next to Daily Agenda. First access the Reminders and Notifications menu and then check the box next to Daily Agenda.

Be alerted of interruptions to your commute before you leave

Once you’ve set up your commute destinations in Google Maps, Google Now (part of the Google Search app) will send you a notification with real-time traffic updates, including incidents, before you hit the road. You can even sync Google Now with your Calendar to get traffic updates before your meetings, and make sure you’re not late for appointments with your vendors and customers.

Don’t let email take over your day

According to a report by McKinsey, the average person spends 28% of his work week going through emails. There are a few systems you can put in place to minimize the amount of time you spend emailing. Instead of reading an email the second it hits your inbox, designate a few times throughout your day to check email. Remember to practice the four D’s: do, delegate, dump, or delay.

Stay synced and organized with Google Apps

As you juggle everything that requires your attention, take advantage of time saving tools that keep your information current across all the devices you use throughout the day. Your Google account allows you to sync your calendar, maps, email, and even the notes you take on your phone with just one click. Watch this video to learn more about how you can even use Google Chrome to improve your productivity.

Prepare for tomorrow with end-of-day rituals

How you spend the last few minutes of your workday can have a great impact on the following morning’s success. The simplest way to bring closure to your day is to ask “What went well?” Then, as you prepare your to-do list for the following day, write down the top three things you want to accomplish to help you prioritize your time.

Selling to the Defense Commissary Agency

Defense Commissary AgencyBy Beth White, Iowa PTAC

The Defense Commissary Agency (DeCA) – the “Other Defense Agency”

Did you know that there is a “littler known” agency within the Department of Defense that provides food and other household products for military families, with the major mission to improve their quality of life?

This agency is the Defense Commissary Agency, and another interesting point is that they buy a lot more than food and beverages for families. The Defense Commissary Agency (DeCA), is considered an “Other Defense Agency”, and manages a worldwide chain of stores that provides groceries and supplies to families (military, retirees and other authorized patrons) at cost (plus a small surcharge fee).

But you don’t sell food products?? Remember I said they bought many other items/services, to include but not limited to:

  • Services: Shelf Stocking, Custodial, Receiving/Stocking management, Armored Car, Inventory, Linen/Laundry, Pest Control, Trash Removal
  • Supplies: Packaging products, paper bags, plastic bags, labels
  • Construction/A/E Services: Design, New construction, Renovations, Remodeling
  • Food/Resale Items: This category includes the food products, non-alcoholic beverages, pet foods, detergent, health/beauty products etc.
  • IT/Software
  • Equipment: Copiers, Balers, Pallet Jacks, Safes etc.

How do they buy supplies/services?

  • As a Federal agency, they are bound to the competition requirements of the FAR, and all procurements valued over $25,000.00 are posted to http://www.fbo.gov.  Click here to see some of the current requirements.
    o With this there will be opportunities for limited/flexible competition if not required to be on FBO. Marketing will help build awareness of those opportunities (see below).
  • Food/Resale items are purchased under slightly different rules known as the Grocery Items Special Rule in 10 United States Code 2486.
    o Name brand items with a UPC that have been sold in supermarkets/commercially, will be purchased on a non-competitive basis and from the manufacturer or an authorized representative.
    o Other than Brand name consumable or household items such as meats, vegetables, firewood etc. will be competed on a competitive, best value basis always on www.fbo.gov.
  • You can read more at the Business Guide for DeCA.

How do you market DeCA to determine if your product/service can/will be purchased?

  • If you are selling brand name products for resale (above), there are some very specific things the agency will ask of vendors (see all on page 9 of the business guide), but some include knowing your distribution/stocking methods, pricing structure, providing samples for evaluation, similarities/differences to other products that are being sold.
  • Contact the small business office, and make initial/follow up contact to market, develop relationships and build visibilities to increase potential opportunities with the agency. The small business office is located at http://www.commissaries.com/business/small_business.cfm
    o Ensure you have done more research on the agency, the locations within your geographic area
    o Research past, current and future opportunities for the supplies/services you sell. DeCA provides information on previous pricing and awarded contracts (click here).

So what do they have going on in the future?

For more information on how DeCA may be a good target customer for your company, or any other Government Contracting related questions, contact your local PTAC’s Procurement Specialists today!


 

More about Procurement Technical Assistance Centers (PTACs)

Ninety-eight PTACs – with over 300 local offices – form a nationwide network of procurement professionals dedicated procurement professionals working to help local businesses compete successfully in the government marketplace. Funded under the Defense Logistics Agency’s Procurement Technical Assistance Program through cooperative agreements with state and local governments and non-profit organizations, PTACs are the bridge between buyer and supplier, bringing to bear their knowledge of both government contracting and the capabilities of contractors to maximize fast, reliable service to our government with better quality and at lower costs.

How the Cloud Can Be Useful for Your Small Business

cloud-computing-small-business-it-support-austinA survey conducted by Microsoft in May, 2014, found that only 30% of small businesses were using cloud technology. This was a surprising statistic considering 60% of those surveyed believed that technology assisted their business in increasing revenue, and another 60% felt that technology helped them to compete with similarly sized and larger companies.  The top three concerns about using technology, expressed by those surveyed, were: the cost of upgrading; security; and ease of accessing content from multiple devices.  Cloud technology adeptly addresses two out of three of these concerns and enables small business owners to maximize their flexibility.

Cloud technology refers to centralized data storage on the Internet that makes it possible to access that data anytime, anywhere, and from any device.  There are multiple benefits of using the cloud for your business.  The cost for file storage, when compared to physical file storage, can be greatly reduced. It is easy to save files and access them on the cloud, even for non-technical small business owners.  The cloud offers flexibility and scalability because how it is used can change as your business changes and grows.  There is also a savings in updates and maintenance because most cloud applications automatically update themselves, versus having an IT person support your system.

Along with using the cloud for data backup and file storage, other benefits of using the cloud for your small business include being able to work from anywhere, anytime, and on any device.  Having a versatile mobile office enables many small business owners to be more efficient in their practices. It also assists in communication and information sharing with staff, customers, and suppliers.

This article would not be complete without mentioning the top concerns associated with using cloud technology.  Security of data stored in the cloud, and loss of control of that data, are the primary issues faced by those businesses using cloud technology.  These are the same issues faced by small businesses when looking at outsourcing any tasks or information, and are addressed in the same ways – by asking questions and identifying with whom you are doing business. Knowing the following can aid in better security and control in the cloud: what data your business will upload to the cloud; what security requirements, such as HIPAA, may apply; how the data and services impact the daily operations of the business; and what requirements apply if or when the cloud service ends.

Understanding how the cloud can benefit your small business can aid you as a business owner in making those decisions to use this accessible, affordable, and versatile technology to increase your business profitability and success.  As with any decision as a small business owner, it is important to research how this tool can improve your business practices, and which cloud applications will best serve your business.

Darcy Shaw, Program Coordinator, Del Mar College Small Business Development Center

10 Ways to Improve Your Small Business

businessgrowthSmall business owners are always watching for ways to improve their company. From streamlining important processes, to saving money on utilities, to hiring better team members, there are dozens  of things that can make a good small business even better. If you’re looking for ways to improve try one of the following tips.

1. Crunch the Numbers

If you’re so busy with the daily operation of your business that you don’t take time out to monitor your business financials, you’re not doing yourself any favors. Crunch the numbers daily, weekly, and monthly so that you know where you stand financially and can make more sound business decisions. Invest in a bookkeeper or bookkeeping software if you are overwhelmed by numbers.

2. Use To-Do Lists

Give yourself a few tasks to accomplish each day and write them down. Then, when it’s time to cross them off your list, you can feel good about what you’ve accomplished. To-do lists are excellent for helping you with time management and prioritization.

3. Jump start Your Morning

Resist the urge to ease into your work by drinking coffee and surfing the Internet from your desk. Give yourself 15 to 30 minutes at most to catch up, and then get started on your to-do list for the day. Set a timer if you need to.

4. Take Time Out to Learn Something New

Make learning a part of your job responsibilities. Read a small business blog for the latest tips and trends, enroll in an online course or one at the community college to learn a new skill, or attend a conference to brainstorm with other small business owners.

5. Let Go of Worries and Stress

Learn to limit the amount of time you spend worrying. Whether you delegate responsibilities to competent staff or set aside a few minutes to meditate, make a habit of freeing yourself from negative, stressful thoughts. When you do, you’ll be a better problem solver.

6. Upgrade Your Technology

Another way to improve your business is to upgrade your technology. You can get faster, more powerful machines, invest in new software to simplify your daily tasks, or make your small business completely mobile. Withimproved technology, your business will be more efficient.

7. Green Up Your Small Business

If your business embraces green practices, you can do more than just save the environment. Going green in many cases helps you create a more efficient workspace while reducing the amount of money you spend on supplies and utilities.

8. Hire Based on Character

You’ve probably seen the quote: “Hire character. Train skill.” There is a lot of truth in this statement, and putting this into practice means surrounding yourself with a positive, hardworking team that can tackle anything with the right attitude. Any skills an employee doesn’t already possess can be learned on the job.

9. Improve Customer Service

You can never go wrong when you implement improved customer service practices, because your customers are your business. If you continue to make them happy and give them the support they need, the improvements will spread throughout your company.

10. Accept a New Challenge

Stagnation is not an option for those who want to improve. If you start to feel too comfortable, accept a new challenge. Business growth comes from trying new things, so look for an opportunity to offer a new service, open a new store location, or break into a new market.

You can tackle each of these tips one by one or try implementing a few at a time. The important thing is that you continually strive to build a stronger and more profitable business.

NAICS Codes & SAM: Listing Solicitation’s Code Not Required

NAICS Code ImageContrary to a common misconception, a contractor need not list the solicitation’s NAICS code in its SAM profile in order to qualify for contract award.

In a recent bid protest decision, the GAO confirmed that the government may award a contract to a small business even if the awardee does not list the solicitation’s NAICS code in its SAM profile.

The GAO’s decision in High Plains Computing, Inc. d/b/a HPC Solutions, B-409736.2 (Dec. 22, 2014) involved a Social Security Administration procurement for video teleconferencing support services.  The solicitation was issued as an 8(a) set-aside under NAICS code 517919.

After reviewing competitive proposals, the agency awarded the contract to National Cable Contracting, LLC.  An unsuccessful competitor, High Plans Computing d/b/a HPC Solutions, filed a GAO bid protest.  HPC contended, in part, that NCC was ineligible for award because NCC did not list NAICS code 517919 on its SAM profile.

The GAO noted that it had examined a similar question in 2007 under the old ORCA system.  In the 2007 case, the agency made award to a firm even though the firm’s ORCA profile did not contain the solicitation’s NAICS code.  The GAO upheld the agency’s decision because “there was no apparent statutory or regulatory requirement for the NAICS code in a solicitation to be listed in an offeror’s ORCA entries, and because the record showed that the contracting officer had a reasonable basis to conclude that the firm was eligible for award under the solicitation’s size standard.”

The GAO wrote that the circumstances in this case were “essentially identical” to those in the prior decision.  “In particular,” the GAO continued, “HPC has failed to identify a statute or regulation requiring that the NAICS code in the solicitation be listed in an offeror’s SAM record, and the record shows that the contracting officer had a reasonable basis to believe that NCC was eligible for award under the solicitation’s size standard.”  The GAO denied HPC’s protest.

In my experience, there is a good deal of confusion–among contractors and government officials alike–regarding the listing of NAICS codes on an offeror’s SAM profile.  As the High Plains Computing case demonstrates, an offeror is not ineligible for award simply because it does not list the solicitation’s NAICS code on its SAM profile.

See more at: http://smallgovcon.com/gaobidprotests/naics-codes-sam-listing-solicitations-code-not-required/#sthash.v4HxEXeZ.dpuf

For help with Government Contracting: contact your nearest Procurement Technical Assistance Center (PTAC). Funded through Cooperative Agreements between the U.S. Department of Defense and state and local governments/institutions, PTACs provide free and low-cost assistance in virtually all areas of government contracting

By Steven Koprince   Posted to Smallgovcon.com  on December 29, 2014