“Contracting with HUBZone Certified Small Businesses”

Mariana Pardo, Director HUBZone Program Washington, DC Alison Mueller, Attorney Advisor Office of General Counsel Washington, DC Presenters:

Hosts: Dwight A. Johnson, Procurement Center Representative SBA Office of Government Contracting, Area IV, Omaha (402) Janis Kaiser, PCR SBA Office of Government Contracting, Area IV, Chicago (312)

Reminders: 1.SBA approves joint ventures of 8(a) firms only. Do not ask any other small business JVs for evidence of SBA approval. 2.WOSB program set-asides are NAICS code driven. 1.Size protestsFAR Part SBA staff FAR Part Certificates of Competency FAR Part Subcontracting plans FAR Part 19.7 SBA Government Contracting Area Directors, Office of Government Contracting ( (

1. Questions answered during the final 10 minutes. AT&T Connect Support at Technical problems? Contact the moderator with a note or call AT&T Connect Support at Page numbers stated for those working of hard copies of the program. 4. We cover the “SBA Quick Reference” as time allows. 5. Find your nearest Procurement Technical Assistance Center at Welcome to “SBA Virtual Learning 2016”

Check this link for past programs: sba-webinar-library/ Contracting officer resources: “How PTACs partner with federal agencies”: Association of Procurement Technical Assistance Centers posts past “First Wednesday” programing

1.There are firms that offer fee for services to assist small businesses in a variety of ways. Registration in SAM, proposal preparations, certifications (not authorized by SBA) assistance in getting on GSA Federal Supply Schedules and so forth. 2.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. 3.The government, through the Department of Defense established the Procurement Technical Assistance Program (PTAP) who have centers throughout the country that do provide this and many other services – most of which are at no cost to a firm.” CAUTION – Do not recommend fee for service firms for SAM registration

FY 2016 TopicPresentersSBA Area 1October 7, (a) Business Development Jackquline Robinson- Burnette HDQTRS 2November 4, 2015 Women-Owned Small Business Ken SilviaIII 3December 2, 2015 SBA Surveillance Reviews 2016 Valerie ColemanV 4January 6, 2016 Consolidation/Bundlin g Jan KaiserIV 5February 3, 2016SDVOSBKeith WayeI 6March 2, 2016Strategic SourcingTom KrusemarkIV 7April 6, 2016 Market Research: Dynamic Small Bus Search Valerie ColemanV 8May 4, 2016HUBZones Mariana Pardo/Alison Mueller HDQTRS 9June 1, 2016SBA Size StandardsDavid GordonIV 10July 13, 2016Nonmanufacturer RuleJanice NietesVI 11August 3, 2016 SBA Subcontracting Assistance (CMRS) Stephanie LewisV 12August 17, 2016 Market Research: Using FPDS Randall JohnstonI 1102 FIRST WEDNESDAY VIRTUAL LEARNING SERIES 2016” 9:30 to 10:30 Central Time

 Self-service: Fill in your name on the certificate slide and save.  Phoning in only? Send an immediately to to verify your participation. If you listen in groups, send s of participants in an excel  Post program . This contains a time sensitive.wmv recording, a transcript of the program, along with another copy of the program PowerPoint. One Continuous Learning Point

Historically Underutilized Business Zone Program 13 CFR part 126 FAR subpart 19.13

1.HUBZONE SET-ASIDES (13 CFR , FAR ) AND SOLE SOURCE AWARDS (13 CFR , FAR ) 2.SET ASIDE OF ORDERS 3.HUBZONE PRICE EVALUATION PREFERENCE IN FULL AND OPEN COMPETITION (13 CFR , FAR ) 4.LIMITATIONS ON SUBCONTRACTING (13 CFR , FAR ) AND NONMANUFACTURER RULE (13 CFR , FAR ) Overview

  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 to )  If SBA determines that a concern is a HUBZone SBC, it will issue a certification to that effect and will add the concern to the List of Qualified HUBZone Small Business Concerns at  Only firms on the List are HUBZone SBCs and eligible for HUBZone contracting preferences and awards SBA ADMINISTERS THE HUBZONE PROGRAM

HUBZone contracts (including Multiple Award Contracts) are those awarded through:  Sole source awards to qualified HUBZone SBCs  Set-aside awards, including partial set-asides, based on competition restricted to qualified HUBZone SBCs  Awards to qualified HUBZone SBCs through full and open competition after a price evaluation preference is applied  Awards based on a reserve for HUBZone SBCs in a solicitation for a Multiple Award Contract  Orders set-aside for HUBZone SBCs against a Multiple Award Contract that was awarded in full and open competition HUBZONE CONTRACTS (13 CFR )

Requirements to bid on HUBZone contract (13 CFR )  At the time a certified HUBZone SBC submits its initial offer on a specific HUBZone contract, it must certify to the CO that:  It is a qualified 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 certification;  It is small 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.

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 of its initial offer and at the time of contract award (13 CFR (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 )

How to Locate HUBZone contractors USING the dynamic Small business search (DSBS)DSBS

 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. DSBS – How HUBZone certification is displayed

DSBS – EXAMPLE OF CURRENTLY CERTIFIED HUBZONE SMALL BUSINESS

DSBS – EXAMPLE OF DECERTIFIED SBC

DSBS – EXAMPLE OF NON-HUBZONE SBC

Relationship among small business programs (FAR )  There is no order of precedence among the 8(a) Program, HUBZone Program, Service- Disabled Veteran-Owned Small Business Procurement Program, or the Women-Owned Small Business (WOSB) Program  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

HUBZONES and parity AT OR BELOW SAT  The requirement to exclusively reserve acquisitions for small business concerns at FAR (a) does not preclude the contracting officer from awarding a contract to a small business under the 8(a) Program, HUBZone Program, SDVOSB Program, or WOSB Program. ABOVE SAT  The contracting officer shall first consider an acquisition for the 8(a), HUBZone, SDVOSB, or WOSB programs before using a small business set-aside. However, if a requirement has been accepted by the SBA under the 8(a) Program, it must remain in the 8(a) Program unless SBA agrees to its release.

1.HUBZONE SET-ASIDES (13 CFR , FAR ) AND SOLE SOURCE AWARDS (13 CFR , FAR ) 2.SET ASIDE OF ORDERS 3.HUBZONE PRICE EVALUATION PREFERENCE IN FULL AND OPEN COMPETITION (13 CFR , FAR ) 4.LIMITATIONS ON SUBCONTRACTING (13 CFR , FAR ) AND NONMANUFACTURER RULE (13 CFR , FAR ) Overview

HUBZONE SET-ASIDE PROCEDURES (13 CFR , FAR )  The contracting officer—  May set-aside acquisitions exceeding the micro-purchase threshold for competition restricted to HUBZone small business concerns; and  Shall consider HUBZone set-asides before considering HUBZone sole source awards or small business set-asides.  To set aside an acquisition for competition restricted to HUBZone SBCs, the contracting officer must have a reasonable expectation that—  Offers will be received from 2 or more HUBZone SBCs; and  Award will be made at a fair market price.

HUBZONE SET-ASIDE – ONLY ONE OFFER or NO OFFERS (FAR (c)) If the contracting officer receives only one acceptable offer from a qualified HUBZone SBC, the contracting officer should make an award to that concern If the contracting officer receives no acceptable offers from HUBZone SBCs, the HUBZone set-aside shall be withdrawn and the requirement set aside for small business concerns, as appropriate (see )

HUBZONE SOLE SOURCE AWARDS (13 CFR , FAR )  A contracting officer may award a contract to a HUBZone SBC on a sole source basis (before considering small business set-asides) if—  The CO does not have a reasonable expectation that offers would be received from 2 or more HUBZone SBCs  The anticipated price of the contract (including options) will not exceed— $6.5 M for a requirement assigned a manufacturing NAICS code; or $4 M for all other requirements  The requirement neither is currently being performed by an 8(a) participant nor has been accepted as an 8(a) requirement by SBA  The acquisition is greater than the simplified acquisition threshold  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 the contracting officer’s decision not to make a HUBZone sole source award

1.HUBZONE SET-ASIDES (13 CFR , FAR ) AND SOLE SOURCE AWARDS (13 CFR , FAR ) 2.SET ASIDE OF ORDERS 3.HUBZONE PRICE EVALUATION PREFERENCE IN FULL AND OPEN COMPETITION (13 CFR , FAR ) 4.LIMITATIONS ON SUBCONTRACTING (13 CFR , FAR ) AND NONMANUFACTURER RULE (13 CFR , FAR ) Overview

Set-asides of Orders  FAR subpart 19.5 – Agencies may: set aside part or parts of a multiple-award contract for HUBZone SBCs set-aside orders placed against multiple-award contracts for HUBZone SBCs reserve one or more contract awards for HUBZone SBCs, under full and open multiple-award procurements  FAR subpart 8.4 – Agencies may set-aside orders and BPAs under the GSA Schedule  FAR subpart 16.5 – Agencies may set-aside orders for SBCs in connection with multiple award contracts and no justification for this exception to fair opportunity is required

SET-ASIDE OF ORDERS – FAR PART 19 APPLIES FAR (a)(2) states that when setting aside orders and BPAs against the Schedule:  The specific small business program eligibility requirements identified in part 19 apply. FAR (b)(2)(i)(F) states that when setting aside orders for small business concerns:  The specific small business program eligibility requirements identified in part 19 apply. What does this mean? Examples:  HUBZone joint venture requirements apply  HUBZone performance of work requirements apply

1.HUBZONE SET-ASIDES (13 CFR , FAR ) AND SOLE SOURCE AWARDS (13 CFR , FAR ) 2.SET ASIDE OF ORDERS 3.HUBZONE PRICE EVALUATION PREFERENCE IN FULL AND OPEN COMPETITION (13 CFR , FAR ) 4.LIMITATIONS ON SUBCONTRACTING (13 CFR , FAR ) AND NONMANUFACTURER RULE (13 CFR , FAR ) Overview

PRICE EVALUATION PREFERENCE FOR HUBZONE SBCs –”Full and Open” only (13 CFR , FAR )  The price evaluation preference for HUBZone SBCs 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)

APPLYING THE PRICE EVALUATION PREFERENCE  The contracting officer shall give offers from HUBZone SBCs a “price evaluation preference” by adding a factor of 10% to all offers EXCEPT—  Offers from HUBZone SBCs that have not waived the evaluation preference  Otherwise successful offers from small business concerns  The factor of 10% shall be applied on a line item basis or to any group of items on which award may be made

  The large business is the lowest, responsive and responsible offeror.  After applying the 10% PEP to the large business, the large business is still the lowest, responsive and responsible offeror as compared to the HUBZone SBC.  In this example, the application of the PEP does not benefit the HUBZone SBC. The large price is still lowest. OFFER:PEP APPLIED: HUBZone$113HUBZone$113 Small$103Small$103 Large$100Large$110 Price evaluation preference – example 1

 The large business is the lowest, responsive and responsible offeror.  After applying the 10% PEP to the large business, the large business is no longer the lowest, responsive and responsible offeror as compared to the HUBZone SBC.  In this example, the application of the PEP does benefit the HUBZone SBC. OFFER:PEP APPLIED: HUBZone$100HUBZone$100 Small$97Small$97 Large$95Large$ Price evaluation preference – example 2

1.HUBZONE SET-ASIDES (13 CFR , FAR ) AND SOLE SOURCE AWARDS (13 CFR , FAR ) 2.SET ASIDE OF ORDERS 3.HUBZONE PRICE EVALUATION PREFERENCE IN FULL AND OPEN COMPETITION (13 CFR , FAR ) 4.LIMITATIONS ON SUBCONTRACTING (13 CFR , FAR ) AND NONMANUFACTURER RULE (13 CFR , FAR ) Overview

 The CO may waive this 50% requirement if (s)he determines that at least 2 HUBZone SBCs cannot meet it Services (except construction)  Spend at least 50% of personnel costs on own employees or on the employees of other HUBZone SBCs Supplies  Spend at least 50% of manufacturing cost (excluding materials) on performing the contract in a HUBZone  One or more qualified HUBZone SBCs may combine to meet this percentage General Construction  Spend at least 15% of personnel costs on own employees, and  At least 50% on employees of other HUBZone SBC(s), unless waiver granted by CO Special Trade Construction  Spend at least 25% of personnel costs on own employees, and  At least 50% on employees of other HUBZone SBC(s), unless waiver granted by CO  A HUBZone SBC prime contractor may subcontract part of a HUBZone contract, provided the HUBZone SBC meets the following requirements: LIMITATIONS ON SUBCONTRACTING (13 CFR , FAR )

LIMITATIONS ON SUBCONTRACTING - CONSTRUCTION  The rule below applies to both general construction and construction by special trade contractors  Before issuing a solicitation for construction, the CO shall determine if at least two HUBZone SBCs can spend at least 50% of personnel costs on their own employees or employees of other HUBZone SBCs  If the CO determines that at least two HUBZone SBCs cannot meet the 50% requirement, the CO can waive it by using the Alternate I to the or -4 clause. HUBZone SBCs would then need to meet general LOS requirements (i.e., 15% for general construction and 25% for specialty construction)

NONMANUFACTURER RULE (NMR) (13 CFR , FAR ) A HUBZone SBC may submit an offer for supplies as a nonmanufacturer if it meets the requirements of the nonmanufacturer rule set forth at 13 C.F.R. § (b)(1) and if the small business manufacturer providing the end item is also a HUBZone SBC  There are no waivers to the nonmanufacturer rule for HUBZone contracts  For HUBZone contracts at or below $25,000 in total value, a HUBZone SBC may supply the end item of any manufacturer, as long as the product acquired is manufactured or produced in the U.S.

 When do the HZ LOS and NMR apply?  HUBZone set-asides  Partial HUBZone set-asides  HUBZone reserves  Orders set-aside for HUBZone SBCs  What is the compliance period?  Full or partial set aside: base term and each subsequent option period HOWEVER, CO may require concern to meet the LOS or NMR for each order  Reserve or order set-aside under F&O: term of order COMPLIANCE WITH LOS & NMR

“Contracting with HUBZone Certified Small Businesses”

Dynamic Small Business Search is alive and well. Link: Dynamic Small Business Search

SBA size regulations13 CFR Part 121 HUBZone regulations13 CFR SBA Certificate of Competency13 CFR Service-disabled veteran13 CFR (b) 8(a) and SDB regulations13 CFR Small disadvantaged business13 CFR (f) WOSB Program13 CFR 127 SBA Prime Contracting13 CFR SBA Subcontracting13 CFR Summary of CFR regulations

A. SBA Government Contracting Area Offices B. SBA Procurement Center Representatives (PCRs) C. SBA Commercial Market Representatives (CMRs) D. SBA District Offices E. SBA Headquarters FIVE TYPES OF SBA CONTACTS & OFFICES

Six SBA Government Contracting Areas at

1. Size protests (with recertification) FAR CFR CFR Locating nearest SBA stafferFAR Certificate of CompetencyFAR CFR COC Limitations on Subcontracting Compliance FAR CFR 125.6(f) 5. Receiving copies subcontracting plans FAR A. SBA Quick Reference - SBA Area Offices

FAR 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…. B. SBA Quick Reference SBA Procurement Center Representatives (PCRs)

1. SBA PCR coordination recordsFAR (b) 13 CFR Small business set-aside appealsFAR CFR 125.2(b)(7) 3. HUBZone set-aside appealsFAR FAR CFR SDVOSB set-aside appealFAR FAR CFR Reporting bundling to SBA (MATOCs)FAR (e)(1) 13 CFR SBA subcontracting plan reviews-copies FAR (3) 13 CFR 125.2(b)(6)(iii) FAR (c) 13 CFR 125.2(b)(6)(iii)(C) 7. SBA subcontracting program reviewFAR (4) 13 CFR 125.2(b)(6)(iii)(C) 8. Small business TFDFAR (e)(4)) (Termination for default) 9. Surveillance review of agency contracting B. SBA Quick Reference SBA PCRs, cont.

AgencyFormTitle 1CommerceCD 570Small business set-aside review 2Defense2579Small business coordination record 3Energy Small Business Review form 4GSA2689Small Business Analysis Record 5HHS653Small business review form 6Homeland Security700-22Small business review form 7Interior1886Acquisition screening and review form 8Labor DL Small Business Procurement Determination. 9NASANF 1787Small business review sheet 10StateDS-1910Small Business Clearance Form 11Transportation4250Small Business Program Review Form 12USDAAD-1205 Small Business Program – Procurement Review 13VA2268 Procurement Request Review For Small Business… Small business coordination forms sent to SBA PCRs

Postaward responsibilities of the contracting officer. …: (a)Notifying the SBA of the award by sending a copy of the award document to the Area Director, Office of Government Contracting, in the SBA area office where the contract will be performed. (c) Giving to the SBA procurement center representative….a copy of— (1) Any subcontracting plan submitted in response to a sealed bid solicitation; and (2) The final negotiated subcontracting plan that was incorporated into a negotiated contract or contract modification. (d) Notifying the SBA procurement center representative…. of the opportunity to review subcontracting plans in connection with contract modifications. Document that you have provided SBA Area Directors with copies of subcontracting plans

1. Prime contractor portfolio management13 CFR Reviews of subcontracting plan holders 13 CFR Matchmaking13 CFR SBA SUB-Net link at: 5. SBA Subcontracting Opportunities Directory link at: “SBLO Handbook” link at: business-liaison-officer-handbookhttp:// business-liaison-officer-handbook C. SBA Quick Reference - SBA Commercial Market Representatives (CMRs) link at: (

Link to district offices at: D. SBA Quick Reference – SBA Regional and District Offices

To locate SBA 8(a) servicing office, check Dynamic Small Business Search at the link: and then local resources at the link assistance/districtoffices assistance/districtoffices D. SBA Quick Reference - SBA District Offices, cont.

1. HUBZone status protests FAR CFR NAICS code appealFAR CFR Non-manufacturer rule waivers FAR (f)(1)-(7) 13 CFR SDVOSB status protest FAR CFR WOSB Program status protestFAR /13 CFR E. SBA Quick Reference - SBA Headquarters

FAR (f ): No class waiver to NMR? Check out an individual waiver*

B. A B. A WAIVER FOR A SET-ASIDE IS NOT NEEDED WHEN: 1. ONE SMALL BUSINESS MANUFACTURER: * SMALL BUSINESS SET-ASIDE 2. SMALL BUSINESS MANUFACTURER, BRAND SPECIFIC OF ANY DOLLAR SIZE WITH FAR 6 JUSTIFICATION: * SMALL BUSINESS SET-ASIDE 3. LARGE BUSINESS, BRAND SPECIFIC (OR BRAND EQUIVALENT) REQUIREMENT $25,000 OR LESS WITH FAR 6: * SMALL BUSINESS SET-ASIDE C. GSA SCHEDULE: USE THE CLOSEST CODE LISTED ON THE SCHEDULE. THEN SAME AS ABOVE IF NO CLASS WAIVER. D. EXCEPTION TO “NMR” IF PROCUREMENT $25,000 OR LESS. (FAR (F)(7)(B))  A. If you find no class waivers, an SBA individual waiver to the Nonmanufacturer Rule (NMR) may help you to achieve small business goals if*:

NMR Program Office The preferred and most expeditious method for asking questions and submitting waiver requests is by to