Successful Partnering: SBA’s 8(a) Business Development Program Presented by: Alisa Sheard, Acting Supervisory Business Opportunity Specialist for the U.S. Department of Health and Human Service January 11, 2018

Training Outline 8(a) Offer Letters Determinations of Eligibility Sources Sought Contract Modifications Sole Source Requirements Above the Threshold Competitive Requirements Below the Threshold Limitations on Subcontracting Requests to Release From the 8(a) Program Cure Notices Terminations Size Protests and Certification of Competency SBA Mentor-Protégé/Joint Venture Agreements: Impact on Agencies

How to submit an 8(a) Offer Letter 13 CFR 124.502 Agency Role and Responsibility: A procuring activity contracting officer indicates his or her formal intent to award a procurement requirement as an 8(a) contract by submitting a written offering letter to SBA (Reference 8(a) offer letters procedure handout) Sole Source Procurement Threshold is $150K-$4M Services; $7M for Manufacturing Up to $22M for ANCs, Tribes and NHO Offering letter is submitted to the firm’s servicing SBA District Office Competitive Procurement Can be submitted to any SBA office, unless construction procurement which is based on locality Section 12 should be left blank Details of market research can be included

How to submit an 8(a) Offer Letter 13 CFR 124.502(c) Agency Role and Responsibility: Email Offering Letter to dcofferletters@sba.gov and include the following information: 1. A description of the work to be performed; 2. The estimated period of Performance; 3. The NAICS Code that applies to the principal nature of the acquisition; 4. The anticipated dollar value of the requirement, including options, if any; 5. Any special restrictions or geographical limitations on the requirement; 6. The location of the work to be performed for construction procurements; 7. Any special capabilities or disciplines needed for contract performance; 8. The type of contract to be awarded, such as firm fixed price, cost reimbursement, or time and materials; 9. The acquisition history, if any, of the requirement; 10. The names and addresses of any small business contractors which have performed on this requirement during the previous 24 months;

How to submit an 8(a) Offer Letter 13 CFR 124.502(c) Agency Role and Responsibility (con’t): 11. A statement that prior to the offering no solicitation for the specific acquisition has been issued as a small business set-aside, or as a small disadvantaged business set-aside if applicable, and that no other public communication (such as a notice in the Commerce Business Daily/FBO) has been made showing the procuring activity’s clear intent to use any of these means of procurement; 12. Identification of any specific participant that the procuring activity contracting officer nominates for award of a sole source 8(a) contract, if appropriate, including a brief justification for the nomination, such as one of the following: (i) The Participant, through its own efforts, marketed the requirement and caused it to be reserved for the 8(a) BD program; or (ii)The acquisition is a follow-on or renewal contract and the nominated concern is the incumbent; For competitive requirements, leave this section blank.

How to submit an 8(a) Offer Letter 13 CFR 124.502(c) Agency Role and Responsibility (con’t): 13. Bonding requirements, if applicable; 14. Identification of all Participants which have expressed an interest in being considered for the acquisition; 15. Identification of all SBA field offices which have requested that the requirement be awarded through the 8(a) BD Program; 16. A request, if appropriate, that a requirement whose estimated contract value is under the applicable competitive threshold be awarded as an 8(a) competitive contract; and 17. Any other information that the procuring activity deems relevant or which SBA requests. Include a Statement of Work (SOW). Include contact person’s name, telephone, E-mail address, physical address, and FAX Number. Please address the 8(a) Offering Letter to: Julie Clowes DDD/8(a) Business Development, Washington Metropolitan Area District Office, 409 3rd Street, SW, Second Floor, Washington, DC 20416

How to submit an 8(a) Offer Letter (cont.) SBA’s Role and Responsibilities: Confirm firm current & in compliance with 8(a) program Confirm firm is small under the requested NAICS code Confirm sole source restrictions (transitional stage of the 8(a) program No sole source contract awards after firm graduates 5 working day acceptance, 2 working days for below Simplified Acquisition Threshold (SAT)

Offer Letter Do’s and Don’t Tips Make sure the NAICS code matches the work Be sure to price option years Do your homework / Due diligence Give yourself time DO NOTs Do not include the firm on your email Do not negotiate with firm prior to receiving an acceptance letter Do not “compete” a requirement with a few selected firms

Determination of Eligibility (cont.) Assure that it is within our responsible jurisdiction (check the Dynamic Small Business Search - DSBS) Send email to DCOfferletters@sba.gov with the following: Email subject is “Determination of Eligibility” Body of email should include: Anticipated dollar value of the requirement NAICS code and brief description Statement of work attached Name the specific firm and its address Copy of SBA approval letter, if competitive procurement Reps and Certs dates should be included, if competitive procurement

Determination of Eligibility (cont.) Ways that a Determination of Eligibility Letter can be used: Market Research Competitive Procurements General Eligibility Determination (limited number of firms)

8(a) Sources Sought Send email to DCOfferletters@sba.gov with the following: Email subject is “Sources Sought” Body of email should include: NAICS code Short description – Outlining project and key needs Attach Statement of Work (SOW) or FedBizOpps link Your full contact information

New Requirement vs Contract Modifications vs Bridge Contract

When do you involve SBA on a modification? Change in the scope Change in the contract dollar value Change in the period of performance Novation SBA does not need to be notified of administrative changes.

Contract Modification Req’d Info Name and address of the 8(a) firm Date the requirement offered to the 8(a) Program? Contract # and corresponding WMADO #? Original estimated value of the contract? Contract current period of performance? Value contract dollars obligated & expended to date? Will the dollar value proposed modification will exceed original estimated value of the contract? What event(s) caused need to increase the estimated value of the contract or other modification?

Sole Source Above Threshold or Competitive Requirement Below the Threshold Must be approved by AA/BD Send email to DCOfferletters@sba.gov with the following: Email subject is “Sole Source ABOVE Threshold” or “Competitive BELOW the Threshold”

Above or Below Threshold Request (Con’t) Body of email should include: Offer Letter and Statement of Work in a separate document. Sole Source Above Threshold A thorough explanation that there is not a reasonable expectation that at least two eligible 8(a) Participants that will submit offers at a fair price (13CFR124.506(d)). Competitive Requirement Below the Threshold An explanation of the procuring agency’s determination that technical competitions are required or a large number of potential awardees exist [13CFR124.506(c)].

Above or Below Threshold Request (Con’t) The procurement agency’s written commitment to continue to support the SBA 8(a) BD Program on a competitive basis, including the following data: The last two most recent fiscal years’ 8(a) contract dollars that were awarded by the procuring agency to 8(a) Program Participants on a competitive basis; The current fiscal year’s forecast to award contracts to the 8(a) BD Program; and The result of any market research conducted by the procuring agency under the NAICS Code assigned to the proposed contract.

Request to Release From The 8(a) Program (124.504(d)) Must be approved by AA/BD Procuring agency’s official Request to Release on its Letterhead, signed by authorized person, to include: The procurement history; The NAICS Code assigned to the requirement; Previous SBA Acceptance Letter and SBA Buy Number; Plus, any additional supporting documentation.

Request to Release From The 8(a) Program The Agency’s written commitment to continue to support the 8(a) BD Program. This explanation must include: The last two most recent fiscal years’ 8(a) contract dollars that were awarded by the Procuring Activity to 8(a) BD Program Participants on a sole source basis; The current fiscal year’s forecast to award contracts to the 8(a) BD Program; and The result of any market research conducted by the Procuring Activity. (Be sure not to limit geographical area)

8(a) Contract Cure Notices and Show Cause Notices SBA is the Prime on all 8(a) Contracts. Be sure to copy the appropriate SBA District Office that issued the respective Acceptance Letter. The firm’s Business Opportunity Specialist (BOS) can contact the respective 8(a) firm’s owner to determine the issue and discuss the resolution plan. The BOS is able to participate with the 8(a) firm in the communication with your agency on this issue, unless the firm has retained counsel.

Terminations for Convenience The Small Business Administration is the “Prime Contractor” on all 8(a) awarded contracts, and therefore the SBA servicing District Office must be informed on all contracting actions as well as the 8(a) firm

Terminations for Default SBA is the Prime Contractor for all 8(a) Contracts, SBA must be informed commensurate with your agency informing the 8(a) firm contractor. Inform SBA through the SBA District Office that accepted the requirement. The BOS can contact the firm to determine a course of action, if needed. Possible remedy is a substitution with another qualified and eligible 8(a) firm.

Limitations on Subcontracting The Partnership Agreement explicitly address subcontracting limitations in a few ways by requiring the agencies to: at the time of the contract award, conduct and document an assessment of the 8(a) firm’s ability to comply with the subcontracting limitations; include monitoring and oversight provisions in all 8(a) contracts to ensure that the contractors comply with the subcontracting limitations; and ensure that 8(a) contractors comply with the subcontracting limitations. Contracting officers are responsible for implementing these requirements.

Limitations on Subcontracting 13 CFR 125.6 Full or partial small business set-aside contract > $150,000, an 8(a) contract, an SDVO SBC contract, a HUBZone contract, a WOSB or EDWOSB “Similar Situated Entities” are not measured as long as these entities are not further subcontracting the contract. For service contracts, the prime contractor “may not expend on subcontractors more than 50 percent of the amount paid to the concern under the contract.” For supply contracts, the limit for subcontracting is 50% of the amount paid under the contract less the cost of materials.  Supply contracts from a nonmanufacturer, the prime will supply the product of a domestic small business manufacturer or processor, unless a waiver is granted. (13 CFR 121.406(b)(5))

Limitations on Subcontracting 13 CFR 125.6 For contracts which combine both services and supplies, the contractor shall (i) determine which category the greatest percentage of the contract is awarded; (ii) look only at the amount of the contract paid for that category; and (iii) spend no more than 50% of that amount on subcontractors.  For construction contracts, Congress directed SBA to establish an appropriate percentage of the amount paid under the contract as the limit.   The concern will perform at least 15 percent of the cost of the contract, not including the cost of materials, with its own employees

Size Protests and Certification of Competency An outside business cannot protest a sole source award Modifications or Bridge Contracts are potential options for stop work protests Link to Size Protest Guidelines: http://www.sba.gov/category/navigation-structure/contracting/contracting-officials/protests Cerification of Competency (COC) Competitive, new contracts only Not conducted for sole source requirements nor option years

SBA Mentor-Protégé & Joint Venture Agreements SBA now has two Mentor Protégé programs: the 8(a) Program and the All Small Mentor Protégé Program The Mentor Protégé relationship is not a contracting vehicle Both programs remove affiliation and the protégé’s size is the only entity evaluated for a Joint Venture to be considered small Firms must still request an 8(a) Joint Venture approval from SBA separately Copies of these agreements should be included in the submitted proposals SBA has until before contract award to approve an 8(a) JV Agency’s are responsible for monitoring JV contract performance (i.e. work share)

Questions? _________________________ Contact information for Presenters: Alisa.Sheard@sba.gov; 202-205-6729 ___________________________________ Thank You!