SBA 1st First Wednesday Virtual Learning 2017 “Contracting with HUBZone Certified Small Businesses” SBA 1st First Wednesday Virtual Learning 2017

Hosts Dwight A. Johnson, Procurement Center Representative SBA Office of Government Contracting, Area IV, Omaha sbalearning@sba.gov (402) 221-7206 Jan Kaiser, Procurement Center Representative SBA Office of Government Contracting, Area IV, Chicago janis.kaiser@sba.gov (312) 353-7442 Deborah Crumity, Procurement Center Representative SBA Office of Government Contracting, Area IV, Rock Island Arsenal deborah.d.crumity.civ@mail.mil (309) 782-5734

Welcome to “SBA Virtual Learning 2017” Questions answered during the final 10 minutes. Technical problems: Contact the moderator with a note or call AT&T Connect Support at 1-888-796-6118. Page numbers stated for those working off hard copies of the program. We cover the “SBA Quick Reference” as time allows. For more SBA training visit the SBA Learning Center website https://www.sba.gov/tools/sba-learning-center/search/training

Association of Procurement Technical Assistance Centers posts past “First Wednesday” programing Check this link for past programs: http://www.aptac-us.org/for-contracting-officers- sba-webinar-library/ Contracting officer resources: “How PTACs partner with federal agencies”: http://www.aptac-us.org/federal-partners/ Find your nearest Procurement Technical Assistance Center at http://www.aptac-us.org

Return to 9:30 – 10:30 am Central for remainder of the 2017 season FIRST WEDNESDAY VIRTUAL LEARNING SERIES – 2017 SCHEDULE 9:30 to 10:30 Central Time Return to 9:30 – 10:30 am Central for remainder of the 2017 season FY 2017  Date  Topic 1 October 5, 2016 Non-Manufacturer Rule 2 November 2, 2016 Market Research: Using FPDS & DSBS 3 December 7, 2016 New All SB Mentor-Protégé Program 4 January 11, 2017 SBA Surveillance Reviews 2017 5 February 1, 2017 Certificate of Competency Program 6 March 1, 2017 Historically Underutilized Business Zones 7 April 12, 2017 Gov’t Subcontracting Compliance 8 May 3, 2017 Woman Owned Small Business 9 June 7, 2017 SBA’s Size Program 10 July 12, 2017 Small Business Legislative Updates 11 August 2, 2017 8(a) Business Development The program schedule above is for information only and is subject to change.

Looking for Your Feedback Your input is needed and we are requesting that you respond regarding the following issues… Time Change Trial: We conducted a time change trial in DEC – JAN – FEB and held the First Wednesday training later in the day. Please provide your thoughts about the training and what worked best you and your activity. Calling for Topics for Next Year: Please tell us what topics you would like covered in next year’s program. Please respond to the survey BY MARCH 31, 2017 to provide your opinion at:  https://www.surveymonkey.com/r/R8CP9RT If your agency prohibits access to the Survey Monkey website send your thoughts to sbalearning@sba.gov.

One Continuous Learning Point Self-service: Fill in your name on the certificate slide and save. Download the certificate and print for your records. You submit your request for training credit IAW your agency policy, i.e. FAITAS. Phoning in only: If you listen in groups and you want all attendees to be included on the future mailing list, send email addresses of participants in an excel document to sbalearning@sba.gov.

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

Presenters Mariana Pardo, Director HUBZone Program Washington, DC mariana.pardo@sba.gov Alison Mueller, Attorney Advisor Office of General Counsel Washington, DC Alison.Mueller@sba.gov

“Contracting with HUBZone Certified Small Businesses” SBA on Small Business Joint Ventures SBA on Small Business Joint Ventures 1/27/2018 “Contracting with HUBZone Certified Small Businesses” Historically Underutilized Business Zone Program 13 CFR part 126 FAR subpart 19.13 10 10

Overview OVERVIEW HUBZONE SET-ASIDES AND SOLE SOURCE AWARDS SET ASIDE OF ORDERS HUBZONE PRICE EVALUATION PREFERENCE IN FULL AND OPEN COMPETITION LIMITATIONS ON SUBCONTRACTING AND NONMANUFACTURER RULE

overview

SBA administers the HUBZone Program 5/3/2012 SBA administers the HUBZone Program 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 126.300 to 126.309) If SBA determines that a concern is a HUBZone SBC, SBA will issue a certification to that effect and will add the concern to the List of Qualified HUBZone Small Business Concerns at http://dsbs.sba.gov/dsbs/search/dsp_searchhubzone.cfm Only firms on the List are HUBZone SBCs and eligible for HUBZone contracting preferences and awards SBA HUBZone Program

HUBZone Contracts (13 CFR 126.600) HUBZone contracts (including Multiple Award Contracts) include awards to qualified HUBZone SBCs through: Sole source awards 100% HUBZone set-aside awards and partial set-asides Full and open competition, where the HUBZone price evaluation preference is applied Reserves for HUBZone SBCs under Multiple Award Contracts (MAC) Orders set-aside for HUBZone SBCs against a MAC, where the MAC was awarded in full and open competition

Requirements to Bid on HUBZone Contract (13 CFR 126.601) HUBZones Requirements to Bid on HUBZone Contract (13 CFR 126.601) When a HUBZone SBC submits its initial offer on a specific HUBZone contract, it must certify to the CO that: It is a certified 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 HUBZone certification; It is a small business 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 it submits its initial offer AND at the time of contract award (13 CFR 126.601(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 126.616) NOTE: On February 5, 2015, SBA published a proposed rule that would change this requirement. 80 FR 6618. Under the proposed rule, a HUBZone SBC may joint venture with a non-HUBZone SBC if each concern is small under the NAICS code assigned to the contract, and other requirements are met.

How to Locate HUBZone Contractors Using the Dynamic Small Business Search (DSBS)

DSBS – How HUBZone Certification is Displayed HUBZones DSBS – How HUBZone Certification is Displayed 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 – Example of Currently Certified HUBZone Small Business

DSBS – Example Of Decertified SBC

DSBS – Example of Non-HUBZone SBC

Relationship Among Small Business Programs (FAR 19.203) HUBZones Relationship Among Small Business Programs (FAR 19.203) SBA’s small business socioeconomic programs include: 8(a) Program HUBZone Program Service-Disabled Veteran-Owned (SDVO) Small Business Program Women-Owned Small Business (WOSB) Program There is no order of precedence among these programs 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 Below or AT SAT ($3,500 - $150,000) ABOVE SAT (>$150,000) Acquisition is automatically reserved exclusively for small business CO may award as: small business set-aside 8(a) set-aside HUBZone set-aside SDVO set-aside WOSB set-aside If “Rule of 2” is met— CO expects to receive offers from at least 2 responsible small businesses; and Award will be made at a fair price —Acquisition must be set-aside for small business. Before awarding as small business set- aside, CO must first consider awarding as— 8(a) set-aside (or sole source) HUBZone set-aside (or sole source) SDVO set-aside (or sole source) WOSB set-aside (or sole source) EXCEPTION: “Once 8(a), always 8(a)” rule - If a requirement has been accepted by SBA under the 8(a) Program, it must remain in the 8(a) Program unless SBA agrees to its release.

HUBZONE SET-ASIDES AND SOLE SOURCE AWARDS

HUBZone Set-Aside Procedures (13 CFR 126.607, FAR 19.1305) Below SAT CO MAY award via HUBZone set-aside Above SAT CO SHALL consider a HUBZone set- aside before considering a HUBZone sole source award or a small business set-aside To award via HUBZone set-aside, CO must have a reasonable expectation that— Offers will be received from 2+ HUBZone SBCs; and Award will be made at a fair market price

HUBZone Set-Aside – Only One Offer or No Offers (FAR 19.1305(c)) 1/27/2018 HUBZone Set-Aside – Only One Offer or No Offers (FAR 19.1305(c)) If the CO receives— only one acceptable offer from a certified HUBZone SBC the CO should make an award to that concern no acceptable offers from HUBZone SBCs the CO should withdraw the HUBZone set-aside and set the procurement aside for small business concerns, as appropriate (see FAR 19.203) Dwight.Johnson@sba.gov (402) 221-7206

HUBZone Sole Source Awards (13 CFR 126.612, FAR 19.1306) CO may award a sole source contract to a HUBZone SBC (before considering a small business set-aside) if— CO does not expect to receive offers from at least 2 HUBZone SBCs The acquisition is greater than the SAT Anticipated price of the contract (including options) will not exceed— $7 M for a requirement assigned a manufacturing NAICS code; or $4 M for all other requirements The requirement is not currently being performed by an 8(a) participant and has not been accepted as an 8(a) requirement by SBA 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 CO’s decision not to make a HUBZone sole source award Check for FAR inflation change

SET ASIDE OF ORDERS

Set-Aside of Orders A CO may— Set-aside an order placed against a multiple-award contract for HUBZone SBCs (FAR 19.5) and no justification for this exception to fair opportunity is required (FAR 16.5) Set-aside part(s) of a multiple-award contract for HUBZone SBCs (FAR 19.5) Reserve one or more contract awards for HUBZone SBCs under full and open multiple-award procurements (FAR 19.5) Set-aside orders & BPAs under the GSA Schedule (FAR 8.4)

Set-Aside of Orders – FAR Part 19 Applies FAR 16.505(b)(2)(i)(F): When setting aside orders for small business concerns: The specific small business program eligibility requirements identified in part 19 apply. FAR 8.405-5(a)(2): When setting aside orders and BPAs against the GSA Schedule: What does this mean? Examples: HUBZone joint venture requirements apply HUBZone limitations on subcontracting apply

HUBZONE PRICE EVALUATION PREFERENCE (PEP)

Price Evaluation Preference For HUBzone SBCs (13 CFR 126. 613, FAR 19 The HUBZone price evaluation preference (PEP) 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) HZ PEP only applied in F&O, including on non-reserved portion or non-set-aside portion

Applying the HUBZone PEP The CO shall apply the HUBZone PEP in F&O competition, when the lowest, responsive, responsible offeror is a large business The PEP is applied by adding a factor of 10% to— The otherwise lowest, responsive, responsible offer from a large business (AKA the large business that is the apparent successful offeror) Offers from HUBZone SBCs that have waived the PEP Offers from small business concerns that are not the apparent successful offeror NOTE: Apply PEP first, then do best value analysis NOTE: If PEP waived, then not submitting offer as HZ SBC and do not need to meet LOS or NMR

Price Evaluation Preference – Examples Before PEP applied, the large business is the lowest, responsive and responsible offeror. After applying the 10% PEP, the large business is still the lowest, responsive and responsible offeror. In this example, the application of the PEP does not benefit the HUBZone SBC. OFFER: HUBZone $113 Small $103 Large $100 PEP APPLIED (*10%): HUBZone $113 Small $113.3 Large $110 NOTE: If price equal  Award to the HZ SBC

Price Evaluation Preference – Examples Before PEP applied, the large business is the lowest, responsive and responsible offeror. After applying the 10% PEP, the large business is no longer the lowest, responsive and responsible offeror. In this example, the application of the PEP does benefit the HUBZone SBC. OFFER: HUBZone $100 Small $97 Large $95 PEP APPLIED (*10%): HUBZone $100 Small $106.7 Large $104.5

Price Evaluation Preference – Examples Before PEP applied, the small business is the lowest, responsive and responsible offeror. Since lowest offeror is not a large business, the HUBZone PEP is not applied. OFFER: HUBZone $100 Small $95 Large $97 PEP NOT APPLIED

LIMITATIONS ON SUBCONTRACTING AND NONMANUFACTURER RULE (NMR)

Limitations on Subcontracting (LOS) HUBZones Limitations on Subcontracting (LOS) Final Rule published at 81 FR 34243 – Effective June 30, 2016 Saturday, January 27, 2018 NEW: A HUBZone SBC prime contractor may subcontract part of a HUBZone contract, provided the HUBZone SBC meets the following requirements: Services (except construction) Spend no more than 50% of the value of the prime contract on subcontractors that are not HUBZone SBCs Supplies (from a manufacturer) General Construction Spend no more than 85% of the value of the prime contract on subcontractors that are not HUBZone SBCs Cost of materials are excluded Special Trade Construction Spend no more than 75% of the value of the prime contract on subcontractors that are not HUBZone SBCs NOTE: Subcontractors that are also HUBZone SBCs are referred to as “similarly situated entities”

Nonmanufacturer Rule (NMR) (13 CFR 126.601, FAR 19.1303) NEW: A HUBZone SBC may submit an offer for supplies as a nonmanufacturer if it meets the requirements of the NMR set forth at 13 C.F.R. § 121.406(b)(1) Final rule effective June 30 (81 FR 34243) eliminated the requirement that the manufacturer also be a HUBZone SBC NEW: A CO may request a waiver of the NMR for a HUBZone contract Final rule effective June 30 authorized NMR waivers for HUBZone contracts As a result, the HUBZone program’s treatment of the NMR is now consistent with SBA’s other socioeconomic programs For HUBZone contracts at or below $25,000, a HUBZone SBC may supply the end item of any domestic manufacturer. This means the manufacturer may be a large business, but the product acquired must be manufactured or produced in the U.S.

Compliance With LOS & NMR When do the HZ LOS and NMR apply? HUBZone set-asides Partial HUBZone set-asides HUBZone reserves Orders set-aside for HUBZone SBCs Awards to HUBZone SBCs under F&O after HZ PEP applied What is the compliance period? Set aside (full or partial): Base term and each subsequent option period HOWEVER, CO may require concern to meet the LOS or NMR for each order Order set-aside under F&O: Term of order

Questions

”SBA Quick Reference”

Dynamic Small Business Search

Summary of CFR Regulations SBA Size Regulations 13 CFR Part 121 HUBZone Regulations 13 CFR 126.616 SBA Certificate of Competency 13 CFR 125.5 Service-Disabled Veteran 13 CFR 125.15(b) 8(a) and SDB Regulations 13 CFR 124.513 Small Disadvantaged Business 13 CFR 124.1002(f) WOSB Program 13 CFR 127 SBA Prime Contracting 13 CFR 125.2 SBA Subcontracting 13 CFR 125.3 44 44

Types of SBA Contacts and Offices A. SBA Government Contracting Area Offices 1. SBA Procurement Center Representatives (PCRs) 2. SBA Commercial Market Representatives (CMRs) B. SBA District Offices 1. Business Opportunity Specialists (BOS) C. SBA Regional Offices D. SBA Headquarters 45 45

Six SBA Government Contracting Areas at hyperlink: https://www. sba

A. SBA Quick Reference - SBA Area Offices 1. Size protests (with recertification) FAR 19.302 13 CFR 121.1001 13 CFR 121.1010 2. Locating nearest SBA staffer FAR 19.4 3. Certificate of Competency FAR 19.6 13 CFR 125.5 4. COC Limitations on Subcontracting Compliance FAR 19.601 13 CFR 125.6(f) 5. Receiving copies subcontracting plans FAR 19.705-6

B. SBA Quick Reference - SBA Procurement Center Representatives (PCRs) FAR 19.402  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 PCRs, cont. 1. SBA PCR coordination records FAR 19..501(b)    13 CFR 125.2 2. Small business set-aside appeals FAR 19.505 13 CFR 125.2(b)(7) 3. HUBZone set-aside appeals FAR 19.1305 FAR 19.1306 13 CFR 126.61 4. SDVOSB set-aside appeal FAR 19.1405 FAR 19.1406 13 CFR 125.22 5. Reporting bundling to SBA (MATOCs) FAR 19.202-1(e)(1) 6. SBA subcontracting plan reviews-copies FAR 19.705-5(3) 13 CFR 125.2(b)(6)(iii) FAR 19.705-6(c) 13 CFR 125.2(b)(6)(iii)(C) 7. SBA subcontracting program review FAR 19.707(4) 8. Small business TFD FAR 49.402-3 (e)(4)) (Termination for default) 9. Surveillance review of agency contracting

Small Business Coordination Forms Sent To SBA PCRs Agency Form Title 1 Commerce CD 570 Small Business Set-aside Review 2 Defense 2579 Small Business Coordination Record 3 Energy 4220.2 Small Business Review Form 4 GSA 2689 Small Business Analysis Record 5 HHS 653 6 Homeland Security 700-22 7 Interior 1886 Acquisition Screening and Review Form 8 Labor DL1-2004 Small Business Procurement Determination 9 NASA NF 1787 Small Business Review Sheet 10 State DS-1910 Small Business Clearance Form 11 Transportation 4250 Small Business Program Review Form 12 USDA AD-1205 Small Business Program – Procurement Review 13 VA 2268 Procurement Request Review For Small Business…

Document that you have provided SBA Area Directors with copies of subcontracting plans 19.705-6 Postaward responsibilities of the contracting officer. …: 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.

C. SBA Quick Reference - SBA Commercial Market Representatives (CMRs) link at: https://www.sba.gov/content/cmr-directory Prime contractor portfolio management 13 CFR 125.3 Reviews of subcontracting plan holders 13 CFR 125.3 Matchmaking 13 CFR 125.3 SBA SUB-Net link at: http://www.sba.gov/content/sub-net SBA Subcontracting Opportunities Directory link at: http://www.sba.gov/subcontracting-directory “SBLO Handbook” link at: http://www.sba.gov/content/small-business-liaison-officer-handbook

D. SBA Quick Reference – SBA Regional and District Offices Link to district offices at: http://www.sba.gov/about-offices-list/3

D. SBA Quick Reference - SBA District Offices, cont. To locate SBA 8(a) business development servicing office, check Dynamic Small Business Search at the link: http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm and then local resources at the link http://www.sba.gov/tools/local-assistance/districtoffices

E. SBA Quick Reference - SBA Headquarters 1. HUBZone status protests FAR 19.306  13 CFR 126.801 2. NAICS code appeal FAR 19.30 3 13 CFR 121.1103 3. Non-manufacturer rule waivers FAR 19.102(f)(1)-(7) 13 CFR 121.1204 4. SDVOSB status protest FAR 19.307 13 CFR 125.23 5. WOSB Program status protest FAR 19.308/13 CFR 1275.600 55

FAR 19. 102 (f ): No class waiver to NMR FAR 19.102 (f ): No class waiver to NMR? Check out an individual waiver*

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*: 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 19.102 (f)(7)(B))

NMR Program Office The preferred and most expeditious method for asking questions and submitting waiver requests is by e-mail to nmrwaivers@sba.gov.

SBA 1st First Wednesday Virtual Learning 2017 Find your PCR at https://www.sba.gov/content/pcr-directory SBA 1st First Wednesday Virtual Learning 2017