Traditional Procurement Programs Full and Open Competition –Unrestricted –Small Business Set Aside Small business set-a-sides –8(a) –HUBZONE –Service Disabled Veteran Owned –Woman-owned Business (Pending) Prime contractor Sub-contract Program

Federal Procurement Goals Federal procurement goals provide agencies with a strong incentive to look for qualified small businesses when awarding contracts. Explore: SBA Certification Programs Self-certification Programs

Special Emphasis Groups 23% overall small business goal Woman-owned small businesses –5% goal –Proposed rule published March 4, 2010 –Robust certification in ORCA Service Disabled Veterans –3% goal –Register in –Restricted competition

SBA Certification Programs SBA programs assist specific groups in securing federal contracts: Historically Underutilized Business Zone Program (HUBZone) 8(a) Business Development Program

Section 8(a) Business Development Program Owned and controlled by socially and economically disadvantaged U.S. Citizens Personal net worth may not exceed $250,000 51% unconditionally owned by disadvantaged individuals Nine years Two-year rule Automatically certified SDB

HUBZONE Program Historically Underutilized Business Zone Empowerment contracting program Provide Federal contracting assistance Increase employment opportunities Stimulate capital investment Electronic application 3% goal

HUBZONE Program Requirements Principal office physical location: –Within one or more qualified census tracts, or –Qualified non-metropolitan counties, or –Federally recognized Indian reservation Exclusively owned and controlled by U.S. Citizens At least 35% of employees reside in a Hubzone

HUBZONE Contractual Assistance HUBZONE set-aside contracts Sole source and competitive Price evaluation preference Subcontracting opportunities 3% Federal contracting goal to applywww.sba.gov/hubzone

How Does the SBA Help Me Become a Government Contractor? Procurement Forecasts - -Resources and Opportunities -Federal Agency Procurement Forecasts 1. Procurement Forecast 2. Select Agency

Training and Counseling Programs Small Business Training Network – a virtual campus Business Opportunities: A Guide to Winning Federal Contracts Free, online “ how-to ” courses on federal procurement procedures

Identify Subcontracting Opportunities Teaming with a prime contractor can be a profitable experience. Experience gained as a subcontractor helps you in bidding on prime contracts. SBA ’ s SUB-Net searchable database posts subcontracting opportunities. –SUB-NET

13 SBA SURETY BOND GUARANTEE What Contractors Need To Know About Bonding

14 SBA’s Role SBA provides – Bid Bond Payment Bond Performance Bond Gives sureties an incentive to provide bonding Strengthens contractors ability Increases access to contracting opportunities SBA assumes percentage of loss

15 SBA’s Role Cont’d Guarantee bonds for contracts up to $2.0 Million – Note: Under 2009 Recovery Act, up to $5.0 and $10.0 until September 30, 2010 Reimburse surety for losses incurred Prior Approval Program – SBA Guarantees 90% of losses on bonds up to $100,000 on bonds to certified 8(a) and SDB firms; 80% on all other bonds Preferred Surety Bond (PSB) – 70% Guarantee SBA’s bonds do not cover subcontractors

16 SBA Surety Bond Guarantee Program -Agent reviews application, recommend to surety company for approval -Package sent to SBA/SBG Area Office for evaluation -SBA issues guarantee to surety company -Surety company must be certified by U.S. Treasury -Designed for smaller, less experienced firms

17 Contractor’s Eligibility Requirements Small business Independently owned and operated Possess good reputation Not debarred or suspended No default on previously SBA guaranteed bonds U.S. Citizen or registered legal alien Ensure satisfactory performance of contract Contract cannot exceed $2.0 Million - Note: Under 2009 Recovery Act, up to $5.0 and $10.0 until September 30, 2010 Apply for a specific bond

18 Contractor’s Responsibilities Prequalification Checklist -Organizational Chart -Resumes -Business Plan -Work in Progress -Continuity or Completion Plan -Line of Credit -Letters of Recommendation

19 What Do Bonds Cost? No charge for bid bonds SBA processing fee of $7.29 per thousand dollars of the guaranteed amount Surety bond premiums range from one-half of one percent to two percent of the contract amount Factors considered: size, type, duration of project, contractor

20 SBA Surety Bond Guarantee Program Typical Contractor Profile –Start-up firms –Under 3 years in business –Marginal financial resources Working capital Equity –Losing year okay –Leveraged –No prior bonded project experience –Changing specialty –Marginal credit history –Note: we provide guarantees to many existing, medium size firms

Is Becoming a Government Contractor Right for You? Can you spend the time required to identify agencies and buyers? Can your business financially support the costs involved in a government contract? Are you prepared to learn and follow the federal procurement rules?

Getting Started – Registering with the CCR The Central Contractor Registration is an online database of companies wanting to do business with the federal government. Buying agencies can search the CCR for vendors. Creating and updating your small business profile in CCR gives your firm access to contracting opportunities.

Getting Started – the Dynamic Small Business Search From CCR, enter your business profile in SBA ’ s Dynamic Small Business Search database. Using the DSBS, agencies can quickly identify potential small business vendors.

Jo Ann Lawrence Louisiana District Office 365 Canal Street, Suite 2820 New Orleans, LA